Melco Crown Entertainment Ltd. said it plans to invest more than $5 billion in Japan casino resorts if it receives permission to build in what could be the world’s second-largest gambling market.
The Hong Kong-based casino operator, the venture between Macau casino mogul Lawrence Ho and Australian billionaire James Packer, prefers developing resorts in the country’s capital of Tokyo and Osaka, Ho said in an interview yesterday in Tokyo.
“The potential is huge for integrated resorts in Japan,” Ho, co-chairman of Melco Crown, said. “If Japan opens up and allows integrated resorts in Tokyo, Osaka, the market could easily be in excess of $10 billion to $15 billion or more.”
Melco joins U.S.-based competitors such as Wynn Resorts Ltd., MGM Resorts International and Las Vegas Sands Corp. in seeking expansion opportunities in Japan as Tokyo’s selection to host the 2020 Olympics boosts confidence the government will legalize casinos. Wynn and MGM executives have said their companies would invest several billion dollars in Japan.
Japan’s capital beat Madrid and Istanbul to host the Summer Games, its second following the 1964 Olympics. Plans to revitalize the capital city’s infrastructure and build adequate accommodations for visitors are an additional catalyst for approving casino resorts, which typically include hotels and other entertainment venues.
Japan has long been touted as an attractive gaming market with a large and relatively rich population base. It also enjoys global appeal as a tourist destination. The country would become the world’s second-largest casino hub generating $10 billion revenue a year should it open up the market, Union Gaming Group LLC estimated.
The 36-year-old son of Macau gambling tycoon Stanley Ho said he has been lobbying with multiple cabinet members in Japan for the legalization of casinos.
The executive sees “significant” non-gaming revenue for the North Asia country as he doesn’t expect “visitors just come to Japan and go straight to casinos. There’s so much to do, so much to see. Japan has a rich culture.”
Wynn Resorts’ investment in a Japan casino “is going to be way bigger” than the $4 billion it is spending on its current project in Macau’s Cotai area, Wynn Resorts Development President and Chief Operating Officer Gamal Aziz said in an interview earlier this month in Tokyo. MGM Resorts would invest “several” billion dollars once the market opens up, President Bill Hornbuckle said.
Both casino operators said they plan to partner with a local consortium to build casino resorts while Sands has said it is “open minded” about the idea. Ho said yesterday the company also considers working with local groups.
The three U.S. companies are interested in developing projects in Tokyo and Osaka.
Melco Crown is expanding both at home and overseas. In the Philippines, it is partnering with Philippine billionaire Henry Sy’s Belle Corp. to develop and operate a casino resort in Manila, which is expected to cost $1 billion.
Lawrence Ho is also investing in two Russian casino resorts worth $630 million through two companies in which he holds a stake, Melco International Development Ltd. and Summit Ascent Holdings Ltd.
Melco Crown is building its Studio City casino resort on Cotai Strip, Macau’s answer to the Las Vegas Strip.
Casino revenue in Macau, the only place in China where casino gambling is legal, raked in $38 billion last year, more than six times that of the Las Vegas Strip and two-thirds of that came from high-stakes gamblers mostly from mainland China.
Lawrence’s father Stanley Ho, 91, nicknamed “the king of gambling” in Macau by the local press, held a gambling monopoly through his company SJM Holdings Ltd. in the former Portuguese colony for four decades until 2002, when the government issued licenses to six operators based outside the city, such as Sands, Wynn and MGM Resorts. SJM Holding is Asia’s biggest casino company.