Casino leaders bet against Japan déjà vu

2021-10-15 17:52     Comment:0

Commentary by Muhammad Cohen*


In late September Caesars Entertainment resumed its pursuit of a Japan casino license. The largest US casino operator, Caesars joined MGM Resorts International as the only top tier gaming companies presently pursuing licenses in Japan. After widespread enthusiasm from Japanese localities, casino operators worldwide and potential investors when the legalization process began in 2013, the smart money has soured on building multibillion US dollar integrated resorts (IRs) in Japan.


Reasons for skepticism about Japan IRs abound: voluminous government regulations and resort requirements, legislative and bureaucratic delays, persistent public opposition to casinos, high development costs and COVID-19. As things stand now, Japan’s two biggest cities, its largest region – one-third of the national population and the leading regional economy on Earth – and its top two tourists destinations aren’t seeking IRs. On the corporate side, the IR contest has attracted only international gaming also-rans, with the top gaming companies in Macau absent for various reasons.

 That’s reminiscent of 20 years ago, when the biggest names in Las Vegas harbored doubts about Macau after discovering mobsters shot it out downtown in broad daylight before the 1999 handover and casino monopolist Stanley Ho Hung Sun dominated the entire business sector. Then-leading Vegas operator MGM mounted an indifferent concession bid, with CEO Terry Lanni neglecting to visit Macau, alienating local authorities. Number two Caesars partnered with a Strip rival, more interested in sharing risk than reaping rewards. Harrah’s, about to become the world’s largest casino operator, didn’t bid at all. In that vacuum, Las Vegas 2001 B-listers Sheldon Adelson and Steve Wynn got selected instead.

 History shows that Macau became the premier casino destination on Earth with gaming revenue six times bigger than Las Vegas in 2019. Since the opening of Sands Macao in 2004, the three Las Vegas companies operating in Macau – Wynn Resorts, Las Vegas Sands and MGM (licensed via Stanley Ho’s daughter Pansy Ho Chiu King) – have prospered while their competitors floundered, went bankrupt or got bought.


Caesars, which includes Harrah’s of 2001,and MGM are betting that Japan’s integrated resort experiment might succeed despite the obstacles and that history could repeat itself, or at least rhyme. With a late April deadline for license applications and plenty of attractive localities unspoken for, there’s still time for Macau’s leading casino operators to wager on Japan. Or, if gaming history does repeat itself, they’ll be on the wrong side of it.

*Muhammad Cohen has covered the casino business in Asia since 2006, currently as a columnist for and a contributor to Forbes. He’s also the author of Hong Kong OnAir, a novel set during the 1997 handover about TV news, love, betrayal, high finance, and cheap lingerie.


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