In 2015, Galaxy Entertainment struck a deal with the Société des Bains de Mer et du Cercle des Étrangers à Monaco (SBM), to buy 5% of the casino firm out of Monaco. The $47-million deal was mutually beneficial, as it gave SBM a foot in the door to expand into the Asian market. That partnership could turn out to be highly lucrative, as the Galaxy-SMB alliance is more than likely going to try for one of the three casino licenses to be awarded by Japan.
In an interview with GGRAsia at the Japan Gaming Congress in Tokyo last week, SMB Managing Director Jean-Louis Masurel said, “We wanted to expand in Asia, and we decided it would be stupid to try and do it alone. It wouldn’t make sense if we had neither the human nor financial resources to do so. So that’s why we wanted to have a partner.”
Masurel added that there were similarities between Galaxy and Monaco that made choosing Galaxy an easy decision. Both casino companies were family controlled, although in the case of SBM it’s through the Monaco government by Prince Albert. Monaco is ruled by the House of Grimaldi, a royal family that has Italian roots from as early as the mid-1100s. The principality has been controlled by the Grimaldi family since, with Albert II of Monaco currently serving as its leader.
“We knew whatever we could do together [with Galaxy Entertainment] we could build it for the long term,” he explained. “It’s not a three-year or five-year agreement. When we signed the cooperative agreement, it’s for eight years, renewable for eight years and then for periods ad vitam.”
Galaxy Director Michael Mecca was asked about the relationship between China and the Lui family, Hong Kong owners of the Galaxy, and whether or not friction between Japan and China could prevent the company from securing the license. “From a geopolitical point of view, we feel the two countries are working more closely together,” was his response.
Galaxy has been grooming a team of executives in an effort to try and appease Japan’s licensing board when the time comes. In April, it hired Ted Chan, former Melco senior executive, to be the company’s chief operating officer for Japan. Mecca explained, “We started several years ago, forming an association with one of the most significant hoteliers in Japan, Mike [Yukio] Isa, who had been 35 years with Hyatt [Japan K.K.]. Mike has done a very, very good job introducing the brand of Galaxy, and all of us, to business leaders and officials in Japan. Having Ted [Chan] move to Japan, to become our chief operating officer of Japan development… was part of the move toward the development phase [of the sector].”
