Casino operator Melco Crown Entertainment (MCE) is prepared to spend $5b building a casino in Japan, should it be fortunate enough to beat out the fierce competition vying for the same rights. While Japan has yet to pass the necessary legislation authorizing construction of integrated resort casinos, MCE co-chairman Lawrence Ho described the country’s casino potential as “huge,” potentially worth between $10b and $15b annually. MCE was one of six casino companies that laid out their Japanese hopes and dreams at the Union Gaming Development Conference in Tokyo earlier this month.
On Friday, Ho told Bloomberg that MCE’s preference would be to build a casino in either Tokyo or Osaka. These locations have also been labeled highly desirable by MCE’s competitors, which isn’t a great surprise, given that a former Japanese government official recently told the Asahi Shimbun that “operating a casino in Tokyo would be like buying a lottery ticket that is already a winner.”
Like many of its competitors, Ho said MCE would consider partnering with a local company on a casino project. Selecting the right partner could be critical, according to International Casino Institute CEO Takashi Kiso, who is advising Japan’s government on the casino approval process. Speaking at this week’s Global Gaming Expo (G2E) in Las Vegas, Kiso said Japan was a difficult market to navigate without the networks and relationships that only a strong local partner could contribute.
Ho said Japan’s “rich culture” would ensure that the opening of a couple integrated resorts would help generate “significant” non-gaming revenue from international tourists. The model here is Singapore, which has managed to strike a balance between gaming and non-gaming revenue, unlike Macau, which is coming under increased criticism from Beijing regarding its over-reliance on revenue generated via the casino floor.
Ironically, Singapore could be the one regional market most affected by the opening of casinos in Japan. Fitch Ratings issued a note this week suggesting that Japanese casinos would “target and attract a broad Southeast Asian and international visitor base.” That’s unlikely to affect Macau, which saw nearly two-thirds (65.5%) of its August visitors arrive from the Chinese mainland – the highest ratio since Macau began tracking these stats in 1998. Meanwhile, visits from jurisdictions like Hong Kong, Taiwan, Indonesia and Japan all declined in August.
