Two US billionaires are betting on rival cities, Tokyo and Osaka, to be the first in Japan to open casino resorts — once the government gives the go-ahead to legalize gambling.
Japan is one of the world’s last untapped gaming markets and could become the third-largest gambling destination after Macau and the US, with annual revenue of more than US$40 billion, broker CLSA has said.
Japanese lawmakers who support legalizing casino gambling hope to see initial draft legislation this year, with the first resort opening by 2020, when Tokyo is to host the Olympic Games.
In a race for first-mover advantage, 76-year-old Chicago real-estate mogul Neil Bluhm has set his sights on Osaka, while Las Vegas gaming tycoon Sheldon Adelson, four years his senior, is putting his weight behind a Tokyo flagship resort.
Bluhm, who owns casinos in Pennsylvania, Chicago and Niagara Falls, has a net worth of US$2.6 billion, according to Forbes. He believes Osaka, one of Chicago’s “sister cities,” has the kind of flexible local government that will help drive this project, and, crucially, has “shovel-ready” sites.
He says the whole process — from approval to construction — in Tokyo would be more complex, time-consuming and expensive.
While Adelson has not ruled out pitching for Osaka, he sees Tokyo as the main prize, given its highly affluent population of 13.2 million. The CEO of Las Vegas Sands Corp, who Forbes says is worth close to US$39 billion, has pledged to spend US$10 billion as Japan opens up to legal gambling — an offer he says his rivals cannot match.
Sands, which has casinos in Macau, Singapore and Las Vegas, remains bullish on its Japan plans given the country’s wealthy population and proximity to China.
“We are very confident in our ability to generate a return that would be satisfactory to our shareholders,” George Tanasijevich, managing director for global development, said in a telephone interview.
He did not elaborate.
Bluhm shrugs off rivals’ talk of big spending.
“Sometimes people like to throw big numbers around in order to get picked... We have been more for Osaka in the US$4 billion to US$5 billion range,” he said.
Bluhm also reckons he may have an edge over the big operators in Macau — who he thinks likely prefer Tokyo — by working alongside local partners.
“In reality, they are going to want to totally run the project. They are probably not used to having partnership relationships like we are,” he said.
Osaka’s government is keen for foreign operators to use Japanese firms in a consortium or joint venture, said Masayuki Inoue, director general of the city’s economic strategy bureau, adding that Osaka wants a large casino resort with convention and entertainment facilities.
“Osaka is flexible. We’re ready to discuss anything,” he said.
The Kansai Keizai Doyukai, a leading local business lobby, thinks land costs in Osaka will be a tenth of those in the capital, about 250km to the northeast. And, it says, the city can offer a development area three times bigger than that occupied by Singapore’s two casino resorts — Marina Bay Sands and Resorts World Sentosa.
In comparison, officials in Tokyo, already setting about preparing for the 2020 Olympics, appear more tortoise than hare.
Industry executives worry privately that Tokyo is so focused on getting the Olympics right that there’s little momentum driving the casino issue. Tokyo Governor Yoichi Masuzoe, a former Japanese health minister, has yet to say whether he will seek a casino license for the capital.