Japan – Osaka rallies for global casino operatorsBy Phil - 24 January 2014
Lawmakers in Japan’s second-biggest city have issued their intention to work with ‘global casino operators’ to develop a resort US$4.8bn casino in Yumeshima, a reclaimed island in Osaka Bay.
Osaka Prefecture Governor Ichiro Matsui said confirmed talks were on-going with Caesars Entertainment, Genting Singapore and MGM Resorts International over plans for the resort.
Governor Matsui said: “It’s just a matter of time before casinos are legalised. Even before the casino bill is passed; Osaka is crafting details of the resort plan so that we could embark on the project at any time. We’d need global casino-operators’ involvement and expertise as the business is new to Japan. To avoid an excess concentration of population and economic growth in the Tokyo area, Osaka is pushing for more infrastructure development and stimulating investment from overseas. That’s vital for Osaka’s future.”
He confirmed that officials had already met with Caesars and Genting in 2013 and are due to hold discussions with MGM in the next few months. CLSA Asia-Pacific Markets have pitched annual GGR for a future Osaka gambling resort at US$5bn.
The governor’s vision is for casino resorts to include entertainment and leisure facilities as well as providing train lines to the reclaimed island, which is located about 2km from the Universal Studios Japan theme park along the Osaka waterfront.
Caesars’ President for International Development confirmed he had toured some of the potential sites in Osaka Bay and that the company was in discussions with potential local partners including gaming machine makers Sega Sammy Holdings and Konami.
Legislators from the ruling Liberal Democratic Party and the Japan Restoration Party both aim to legalise casinos in a Diet session starting this month.
Andy Hurfurt, Head of Investment Consulting for property firm CBRE in Tokyo, said of the timings: “This sort of legislation has been addressed in the Diet before but it has always failed to proceed. This time, I get the impression that they are pushing it through far more forcefully. It will take a while for the legislation to go through and then to get the casinos built, but I think Japan could have its first operating casinos in the next five years or so.”
Deutsche Bank analysts Carlo Santarelli and Kelly Knybel added: “The bill will be debated, presumably in April, depending on how the more pressing session business proceeds, and the debate is expected to take roughly two months. Accordingly, a vote could occur by the end of June, if not sooner, that legalises gaming in Japan. It is important to note that given the need for a majority vote only, and the support of the LDP and New Komeito parties, who on a combined basis are enough on their own to pass the bill, there was little to no concern about potential hiccups at this stage.”