MGM Resort’s James Murren Pledged $5 Billion for a Tokyo Casino
With Japan expected to make land-based casino gambling legal in the next few years, Las Vegas Sands, MGM Resorts International, and Wynn Resorts each have signaled their interest in expanding to the Japanese market. If laws were passed allowing gaming houses in Japan, it would be Asia’s second biggest market next to Macau.
On Monday, Sheldon Adelson of the Las Vegas Sands Corp said his company would spend up to $10 billion to build casino properties in Japan. On Tuesday, MGM Resorts CEO James Murren indicated his corporation would spearhead efforts to invest another $10 billion into Japanese casinos. Murren said his company would want to be at least a 51% investor in a partnership with Japanese land developers and was willing to pledge $5 billion towards such an effort. Steve Wynn earlier indicated he would invest in Japanese gambling, as well.
2020 Olympics Help Prospects
Tokyo is set to host the 2020 Summer Olympics, so any gaming companies would want their operations built and ready for opening by 2020 at the latest. Since Tokyo won the Olympic Games, it’s been expected that integrated casinos might be part of the infrastructure built to accommodate international tourists.
When Shinzo Abe returned to power as Japanese prime minister in the summer of 2013, this was thought to have cleared the way for new gaming laws in his country. Though resort-style gaming establishments are not legal in Japan, the Japanese people have shown tremendous enthusiasm for gambling over the years.
World’s Leader in Gaming Machine Revenues
While Americans might be astounded to learn this fact, the Japanese spend more each year on gaming machines than any other nation on Earth. Their pachinko parlors bring in massive revenues for their owners. Though laws do not allow the pachinko machines to pay real money to winners, they do provide balls which can be redeemed for money in shops nearby. Pachinko machines, which look like pinball machines without flippers stood upright, fill the role that slot machines do in the United States. Also, gamblers in Japan can bet on races, such as boat, bicycle, and horse races.
Combine Japan’s love of gambling with the fact they have the world’s 3rd or 4th largest economy (depending on the economic index you use) and gaming ventures in Japan show every promise of being quite lucrative. One would expect to see most of the large international gaming corporations, such as MGM Resorts and Las Vegas Sands, become involved. For instance, Crown Melco, a partnership between Stanley Ho (Macau’s “King of Gambling”) and James Packer of Australia’s Crown Limited, has already voiced an interest in building casinos in Japan.
Why Japan Will Approve Gambling
Attempts to legalize casinos in Japan have failed in recent years, so many would except new efforts to fail again. When Shinzo Abe’s Liberal Democratic Party controlling the Japanese National Diet–the Diet being the Japanese counterpart to the U.S. Congress–the prime minister’s allies have signaled their readiness to legalize casinos.
Meanwhile, prominent Japanese businessmen like Suntory Executive VP Shingo Torii and Lawson CEO Takeshi Niinami have joined forces to push through legalization. Suntory is the country’s third-largest brewer, while Lawson is the country’s second-largest convenience store chain.
Union Gaming Group Report
One way these men are creating a groundswell of support is to promise private funding for the development projects. If the business community convinces Japanese taxpayers that public funds won’t be required to build the casinos, the politicians who represent those taxpayers are more likely to pass pro-gaming laws.
To that end, the multinational banking firm, Union Gaming Group, was hired to make a report on the likely economic impact on the Japanese economy. United Gaming Group, which has offices in Las Vegas and Macau, indicated yearly revenues would be in the $10 billion range.
With so much support lined up, casino gambling would seem to be poised to become law in Japan, yet those interested in such a result are still cautious, since measures have been defeated before. Many return to the 2020 Olympic tourism as the best trump card that casino proponents have in the upcoming legislative battle. Japanese newspapers and magazines already are debating whether casinos would be positive or negative, and whether the economic windfall of $10 billion would be worth the social costs.
