MGM Resorts International is eyeing the world’s largest fish market as a potential site for its proposed Japanese casino resort.
Sources familiar to the company’s plans told Bloomberg that MGM CEO James Murren visited Tokyo’s Tsukiji market, scouting the 231,000-square meter plot of land that could become available once vendors relocate to a reclaimed land in Tokyo Bay by early 2016. The almost 80-year-old Tsukiji fish market remains a popular tourist destination that attracts 42,000 visitors daily and the Tokyo government decided to move the fish market to a more modern and less-cramped area just four kilometers away.
Once the move is completed, the Tsukiji land could be sold, opening the possibility for a casino operator like MGM to buy it for its casino resort proposal. It’s an ideal site for a casino. It is close to the Shidome skyscraper district and Ginza—a shopping enclave known for its luxury retail shops. It is also near many of Tokyo’s train lines and Hama Rikyu Park, one of the city’s most visited traditional gardens.
MGM Resorts would have to pay a premium to buy the land. A square meter of land costs JPY1.39 million ($13,548), a little higher than the JPY 956K/sq. meter in Odaiba—another favorite spot among casino operators.
Jay Defibaugh, an analyst of Hong-Kong-based brokerage firm CLSA, told Bloomberg that the location justifies the steep price of its land. “While land costs would be higher, Tsukiji promises greater visitor numbers due to its accessibility by transit and proximity to other tourist draws,” Defibaugh said.
“Tsukiji, in terms of accessibility, is almost unrivaled in Tokyo. Even with the higher costs, casino operators would find the site very appealing,” he added.
The Las Vegas-based casino operator hasn’t formally announced its intention to bid for the Tsujiki land. All these plans are still contingent on the Diet passing the Integrated Resorts (IR) Promotion Bill. In the event the bill passes and is enacted into law, a partner at one of Japan’s biggest law firms believes that there will be a two-step selection process to determine which operator receives a casino license in the country.
Masayuki Fukuda, a partner at Nagashima Ohno & Tsunematsu, recently submitted a paper to the International Financial Law Review where he talks about the two-step selection process, beginning with the Japanese government selecting a casino site from all the districts and municipalities that have stepped forward as candidates. It’s not clear if a minister or a ministry will have the power to make that choice but Fukuda believes that Prime Minister Shinzo Abe will have the final word on that issue. Once a site (or sites) has been identified, its municipal body will be in charge of selecting the casino operator.
The system is similar to the two-tier licensing framework used in the UK under the UK Gambling Act 2005.