MGM would spend $10B on Japan casino
Tokyo - MGM Resorts International, the largest casino operator on the Las Vegas Strip, said it's ready to spend $5 billion to $10 billion in Japan, a day after competitor Las Vegas Sands said it planned to make a similar investment should gambling resorts be legalized.
MGM Resorts wants to own at least 51 percent in a partnership with Japanese companies for projects in the country, James Murren, chief executive officer, said in Tokyo. Legalization would make Japan Asia's largest casino market after Macau, according to Union Gaming Group estimates.
Billionaire Sheldon Adelson said Monday his Las Vegas Sands would consider investing $10 billion on a casino project in Japan. Tokyo's selection as host of the 2020 Olympic Games has boosted expectations that gambling resorts, under discussion for a decade, will be made legal as they could boost tourism, help build out infrastructure and revive local economies.
"We will overinvest early on to ensure, as we have done everywhere else, that we have properties that are built to last and that would stand additional competition," Murren said, speaking today at a CLSA Asia-Pacific Markets forum. The final investment amount would depend on conditions such as the tax rate, he said.
CLSA estimates Japan's casino market could eventually generate $40 billion in revenue annually, trailing only the southern Chinese city of Macau in Asia. The former Portuguese enclave had $45.2 billion casino gaming revenue in 2013, seven times that of the Las Vegas Strip.
Hiroyuki Hosoda, the chairman of a cross-party group of pro-casino lawmakers, said he expects the casino bill will win parliamentary approval by June and wants lower house deliberations on the legislation to start around late April.
Wynn Resorts Ltd. is open to a potential joint venture in Japan, President Matt Maddox said at the CLSA Forum in Tokyo Tuesday, without commenting on possible investment.
"Clearly, it would be an expensive project," Maddox said. "The opportunity is very good, but you have to be careful in throwing out billions and billions of dollars without really understanding what the goals are of the city."
Adelson said Monday Las Vegas Sands "will spend whatever it takes" to build a Japan casino resort and is opening offices and hiring in the country. He would also consider working with a local partner, he said.
Caesars Entertainment Corp. is in informal talks with at least 30 Japanese companies to discuss potential partnership, Steven Tight, president for international development, said in an interview. The company wants to build casinos in Tokyo and Osaka, and sees the possibility of developing projects in Okinawa, Hokkaido and Yokohama, he said.
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