Japan Theme Park Considers Buying Island to Boost Casino Appeal

H.I.S. Co.’s Dutch-themed amusement park along Japan’s southwestern coast is considering buying a deserted offshore island in an expansion to boost its appeal as a possible site for a casino resort.

“We are planning to buy new land to offer more games at the Huis Ten Bosch theme park,” Hideo Sawada, chairman of the Tokyo-based travel agency and park operator, said in an interview April 18. “There are a lot of deserted islands nearby.” He said at least 100 billion yen ($974 million) is needed to fund a gambling resort at the park.

Huis Ten Bosch and sites across Japan are preparing to compete for possible gambling resort developments before the nation ends a ban on casinos, with preliminary legislation expected to pass in coming months. Global operators from Las Vegas Sands Corp. to Melco Crown Entertainment Ltd. have said they are prepared to invest billions of dollars should they win permits for casinos in the world’s third-largest economy.

Japan’s casino market could eventually generate $40 billion in annual revenue, trailing only China’s Macau as a gambling hub, CLSA Asia-Pacific Markets estimates.

Adding a casino could double sales at H.I.S., while the effect on profit would depend on how much the company invests, Sawada said. Revenue jumped to 480 billion yen, the highest since at least 1994, in the year ended October and is expected to climb 12 percent to 536 billion yen this fiscal year, according to the average of seven analyst estimates compiled by Bloomberg.

Leasing Land

H.I.S., the country’s largest listed travel agency, plans to lease land to casino developers at Huis Ten Bosch in Nagasaki on the western edge of Japan’s Kyushu island. Sawada bought the development in 2010, following its 2003 bankruptcy, and has returned the property to profit, partly by organizing tours incorporating the park and hotels on the premises.

The travel agency is in talks with video game makers in Japan and overseas to partner on building what Sawada calls a “Game Kingdom” at Huis Ten Bosch. He declined to name companies involved in the negotiations. The facility will offer a variety of interactive games, including a paintball-like battle simulation known as “survival games” in Japan.

H.I.S. is also in discussions with the Japan Racing Association, a government-affiliated group overseeing horse racing, to use its 1,800-seat theater near the theme park as part of the expansion to add an entertainment venue, Sawada said.

Legalization Drive

Japanese lawmakers from the ruling Liberal Democratic Party, the Japan Restoration Party and other groups submitted a bill to legalize casinos to parliament in December. Supporting lawmakers have said they will push for passage this year. A subsequent bill detailing the rules of casino operation would also need to be approved.

Nagasaki Governor Houdou Nakamura said in March that the prefecture will try to introduce casino resorts with the Huis Ten Bosch area as a potential site.

Local governments in Japan’s biggest cities including Tokyo, Osaka and Yokohama have said they intend to pursue casino resort developments, as have representatives of less-populated prefectures including Nagasaki, Miyazaki, Hokkaido and Miyagi.

Huis Ten Bosch is spread across 1.52 million square meters (376 acres), about twice the size of Tokyo Disneyland, according to its website.

Huis Ten Bosch’s operating profit almost doubled to about 5 billion yen for the year ended October 2013, H.I.S. said in a December statement. The business accounted for 38 percent of H.I.S. profit last fiscal year, according to data compiled by Bloomberg.

The theme park posted a net loss of 2.1 billion yen for 12 months ended March 2009, a year before H.I.S. bought it.

Visitors to Huis Ten Bosch rose 29 percent to 2.48 million last fiscal year, it said in a statement.

“We will be the fastest one to build a casino, once there is a green light,” Sawada said. “No other Japanese city can turn a profit on casinos other than us, apart from Tokyo and Osaka.”

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