Japan Resort Casino Might Get $12 Billion Investment

  • Commercial casinos became legal in Japan in 2016 and resort casinos were legalized in 2018
  • Three resort casino licenses are up for grabs and countless operators are looking to get in on the action
  • Osaka is the leading candidate to receive a license because it will host the 2025 World Expo
  • Yokohama is now emerging as another strong candidate as the second biggest city in Japan
  • City officials say they have operators willing to commit as much as $12bn to such a project
Flag of Japan waving in wind
Yokohama says an operator is willing to invest up to $12bn in a casino resort there.

Casino resorts in Japan

For many years, there was a debate about whether casinos should be legal in Japan. Traditionally, it has been a conservative country when it comes to gambling expansion. However, casinos were finally legalized in 2016.

Resort casinos were also made legal in the final hours of the 2018 legislative session. The legislation allows three resort casino licenses to be given to certain cities or regions. The bidding process for these licenses is ongoing.

It will be the responsibility of the city or region with the resort casino license to choose an operating partner. Many global casino companies are vying to obtain one of these licenses because they will be very lucrative in the long run. New regulations for this sector were approved on March 26. The plan is to have the first of these resort casinos open by 2024.

Casino resort requirements

The regions chosen for these licenses will have to tick certain boxes in order to obtain a license. They will require billions of dollars of investment and they will need to be in areas that are accessible to tourists. The developments will create a large number of jobs during construction and after the resorts open.

The resort casinos will put Japan up there with Macau as a premier gambling destination for tourists. People from all around Asia flocking to these three locations to get their gambling fixes will pump funds in the local economy. The casino floors can make up only 3% of the total size of the resort. Each site needs to have an exhibition and convention center.

Advertising for these resort casinos will be curtailed because of concerns that problem gambling will skyrocket. The casinos will be allowed advertise only at international terminals at airports and at cruise ship terminals.

Competitive bidding war

Many cities and regions are vying for these licenses. Osaka appears to be certain to get a license because it is hosting the World Expo in 2025, which will bring large numbers of visitors to the region.

MGM Resorts International is banking on the city getting a license. The company has put in a lot of effort, setting up an office in the city and organizing a team working in the area.

Another major global casino group that is in the running for a license is the Genting Group, which has been around for decades and has operated casinos all across the world, including two casino resorts in Singapore. Genting has a good chance of obtaining a license because of its large cash reserves and its experience.

Yokohama joins front runners

The city of Yokohama has now become another front runner for a license. City officials say that there are casino operators willing to invest as much as $12bn (£9.5bn) in such a project. According to Morgan Stanley analysts, the competitive bidding process for operators will drive up the total investment.

Yokohama, the second biggest city in the country, has received a dozen draft proposals from prospective bidders such  Galaxy Entertainment, the Genting Group, Caesars Entertainment, Melco Resorts, Wynn Resorts, and MGM Resorts. The city is close to the capital of Tokyo. Las Vegas Sands is also strongly vying for a license in the vicinity of Osaka but the company believes that a facility in Yokohama is too far away from a major metropolis.

An executive for the company said: “We need to be in a major urban metropolitan area to be able to build a strong and substantial MICE business.” The company does have a history in the country, so it knows how to do business there.

The founder of Las Vegas Sands, billionaire Sheldon Adelson, previously sold a computer expo trade show to a Japanese bank for $800m (£631.7m). They believe that this experience puts them in a strong position in the bidding process.

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