As Japan edges toward legalizing gambling resorts, USJ Co. is counting on its cachet turning around its Universal Studios theme park to win a partnership with a foreign casino operator.
The operator of Osaka’s 13-year-old Universal Studios Japan is in talks with MGM Resorts International, Caesars Entertainment Corp. and Genting Bhd. for a possible partnership to run a casino resort, Chief Executive Officer Glenn Gumpel said in an interview.
“We have operational capacity, experience know-how, and I don’t think we would be stretched to participate in more than one” casino resort, Gumpel said at USJ’s headquarters located inside the park. “As a company, we would like to grow outside of the current confines of the theme park.”
Prime Minister Shinzo Abe’s ruling Liberal Democratic Party is seeking to pass a law to legalize casinos during the Diet session starting this autumn, as part of plans to boost tourism along with the Tokyo Olympics in 2020.
Operators including MGM, Caesars and Las Vegas Sands Corp. have expressed interest to take part once the ban is lifted and pledged to spend billions of dollars to build a resort.
USJ joins local companies such as Sega Sammy Holdings Inc., Konami Corp. and Dynam Japan Holdings Co. competing for partnerships with casino operators in a market that could be Asia’s second largest after Macau and worth $40 billion a year as early as 2025.
The company is hoping its experience operating a theme park and knowledge of marketing and entertainment will help it to stand out from other suitors.
Osaka has been in talks with operators including Caesars and MGM for a ¥500 billion resort, probably to be sited on a reclaimed island about 5 km from USJ’s park. Other local governments including Tokyo, Yokohama, Hokkaido, Nagasaki and Okinawa have also expressed interest in hosting the resorts.
USJ is looking at Tokyo, Osaka and Okinawa for potential sites and will consider building a casino resort or a new theme park in Neo Park Okinawa, a nature park owned by the city of Nago, according to Gumpel, who joined the operator in 1999.
It could seek to re-list on the Tokyo Stock Exchange as early as next summer as one of its financing options, and is also considering an overseas listing, the executive said Thursday.
USJ had sales of ¥95.9 billion in the year ended March, an increase of 17 percent from a year earlier, according to spokesman Johta Takahashi. Operating profit jumped 51 percent to a record ¥24.2 billion, he said.
USJ, which opened in 2001 as a joint venture between the city and a group of private companies, introduced movie-themed attractions based on Hollywood classics such as “Back to the Future” and “Jaws.” The company was listed in 2007 but was taken private by Goldman Sachs Group two years later as the park’s appeal faded and the number of visitors slumped.
The them park has since recovered as new rides and attractions such as Space Fantasy were brought in, with visitor arrivals hitting 10.5 million last fiscal year, the second highest number since it opened. A new “Wizarding World of Harry Potter” attraction, which opened last month at a cost of $400 million, drew 870,000 visitors to the park in July, a record for the month.
USJ is also planning to expand beyond Japan to invest in the emerging markets of China and Indonesia, and is seeking a tie-up with Shenzhen-based theme park operator Overseas Chinese Town.
The company has also held talks with an Indonesian company about the possibility of opening a theme park in Jakarta.