Two casino operators hoping to claim victory and develop an integrated resort (IR) in the Wakayama prefecture in Japan are one step closer to the final battle to decide a winner. The prefecture has initiated a request-for-proposal (RFP) project for those companies interested in bringing large-scale gambling to the region and, after spending the past couple of weeks reviewing the applications to participate in the scheme, the local government has settled on two companies. Suncity Group Ltd., through its Suncity Group Holdings Japan Co. Ltd. subsidiary, and Clairvest Neem Ventures will now advance to the next round.
Next up, both companies will have to woo and impress local government officials with their project designs. They will need to make sure nothing is left to chance as they prepare to present their proposals by Wakayama’s deadline of August 31, or they risk being disqualified on a technicality. Once they receive the proposals and go over the details with a fine-tooth comb, the officials will select a partner and then submit their final IR proposal to Japan’s national government. That portion of the overall process is expected to be completed by the middle of November.
There is still no guarantee that Wakayama will be chosen as a target for an IR in Japan. Initially, the casino plan approved by the country’s lawmakers two years ago call for three casino resorts to be built, and Wakayama is just one of the contenders. Osaka, Yokohama and Nagasaki are also in the race; however, they are currently spending more time combatting the coronavirus and have decided to put their IR projects on the back burner temporarily. Nagasaki may be the next to get back into the race, though, as it, as well as Wakayama, is no longer included in a list of prefectures that saw emergency measures ordered by the government as a result of COVID-19.
As the IR picture in Japan continues to be drawn, there is no shortage of movement. A surprise move this week found Las Vegas Sands (LVS) dropping out of the race, despite the casino operator having been seen as one of the strongest contenders. It chose to concentrate its efforts elsewhere and, given its recent assertion that mergers and acquisitions are near the top of the list of actionable items, it may already be working on a major deal.
That withdrawal may have been good news to the ears of Melco Resorts and Entertainment. Despite having to deal with several major public embarrassments lately, the company is still determined – possibly more than ever – to be a part of Japan’s gambling future. Company chairman and CEO Lawrence Ho said yesterday during an earnings call, “Nothing has been changed in the last year or two so I can’t speak to that. I can’t speculate why LVS is not pursuing the opportunity. We’ve been working on Japan for a very long time, 15 years, and we continue to think that outside of Macau, Yokohama remains the most attractive IR destination. Even with COVID, our local teams have continued to engage with the Yokohama officials and authority. Ever since Yokohama declared its candidacy, we have said that we are Yokohama first and we’ll continue to do that.”