Last year in December, Japanese lawmakers have opened up avenues for opening up the country to casino gambling. The Prime Minister Shinzo Abe also has made casino liberalization a priority in his agenda. However, the government has not yet made any clarification regarding where these casinos will be opened up and which companies will be operating them. In the meantime, the billionaire owner of Melco Resorts & Entertainment, Lawrence Ho, favors Osaka to Tokyo for his next casino venture in Japan. Ho chose Osaka rather than Tokyo for building a casino as these smaller cities have better opportunity to be developed as entertainment destinations.
Ho, in an interview at Melco’s City of Dreams resort in Macau said, “When you go to the Kansai region, it’s more fun, really, and we’re a company that focuses on fun and entertainment.” Ho added, “I’m not so sure Tokyo needs an integrated resort. Tokyo by itself is amazing. It’s like when people ask me: ‘Do you think New York and London need an integrated resort?’ No, they don’t.”
Japan is a potential market for casino gambling and entering in to Japan means reaping a pie out of the world’s most lucrative casino market.According to CLSA estimates, Japan has a potential to generate about ¥2.28 trillion casino revenue annually. According to the Bloomberg Billionaires Index, Ho’s net worth is about $2 billion and he is all set to exploit the benefit. He finds Osaka and the surrounding Kansai region very feasible for his casino operations.
Ho predicts, “That popularity is what makes Tokyo less than optimal for hosting the type of integrated casino resort popular in Las Vegas and Macau”. Ideally, these facilities typically include hotels, entertainment options, shopping and convention centers.“Right now, there is a lot of speed dating. Sometimes, I go into a Japanese corporate’s office, and then I walk out and I see our competitors in the lobby.” Said Ho.
However, Melco is not the only player to exploit this vast opportunity. Melco is competing with rivals Las Vegas Sands and MGM Resorts Internationalfor Japanese licenses.Unlike, Melco which is exclusively seeking out opportunity in Osaka, its rivals are focusing on Tokyo and Yokohama in addition to Osaka.
executive vice president of global development for MGM Resorts, Ed Bowers, said in an interview, “MGM’s business model is to build large-scale destination resorts with lots of stuff that cost a lot of money. So, it needs to be in a high-density population area.”
Ho’s choice for Osaka ahead of Tokyo seems to be a commercially viable option as well. According to Bloomberg Intelligence analysts Margaret Huang and Carmen Lee, “Tokyo’s inflated commercial land prices are higher than the rest of Japan. That may dissuade casino operators from developing an integrated resort there, even with the city’s population and infrastructure.”