National

Las Vegas Sands to focus on Tokyo-Yokohama area for casino, abandoning support for Osaka

Bloomberg

As Japan moves forward with plans to open facilities that allow gambling, Las Vegas Sands Corp. says it is now focusing on the Tokyo and Yokohama areas to find potential locations for a casino resort.

Sands said in a statement Thursday that it is no longer interested in Osaka, long seen as a strong candidate to host the country’s first casino resort.

A maximum of three locations will be allowed under a law passed last year.

The U.S. casino operator’s announcement came hours after Yokohama formally announced it would accept proposals for an integrated resort to be built on its Yamashita Pier. Hong Kong-based Galaxy Entertainment Group Ltd. also issued a statement Thursday saying it was pleased with progress in the Japanese market.

The back-to-back announcements mark the latest steps in a delicate dance between cities seeking to host casino resorts and operators looking to bid on the locations. CLSA, a Hong Kong-based capital markets and investment group, predicts Japan’s gross gaming revenue could reach $20 billion annually.

Casino operators from around the world have descended on Japan in recent years, trying to win over the public as well as national and local politicians, after Japan passed laws to legalize casino gambling and set forth conditions allowing resorts to be built. The draw is the potential to have a foothold in what could become Asia’s second-biggest gaming market after Macao.

In pulling back from Osaka, Sands leaves the field open for other integrated resort companies targeting the bustling city. Osaka has long been viewed as the most probable location for Japan’s first casino resort, thanks to local political support and the high number of tourists drawn to the area.

Partners MGM Resorts International and Orix Corp. have declared an Osaka-first strategy — and their prospects improve now that Sands is dropping out of contention for the city. Other operators such as Melco Resorts & Entertainment Ltd., Wynn Resorts Ltd. and Galaxy have also expressed interest in building a resort there.

MGM Resorts said in a statement Thursday it was “deeply committed” to Osaka. Wynn said separately that while there are numerous areas in Japan that are attractive, the demographics of the Tokyo Bay area, which includes Yokohama, “make that market particularly appealing.”

It will be years until the first resorts open in Japan, because the regulations around the selection of the sites is still a work in progress.

Officials aim to have a casino built on Yumeshima Island in Osaka in time for a World Expo to be held there in 2025. The island is somewhat more remote than locations being considered in Tokyo and Yokohama, Japan’s two largest cities, and would involve extensive construction of hotels and other non-casino amenities.

Focusing on a potential site near Tokyo will help Sands maintain its returns to investors, Chairman Sheldon Adelson said in a statement Thursday. “We think an investment in Tokyo or Yokohama gives us the best opportunity to do exactly that.”