Sands Supplier Konami in Talks to Invest in Casino Projects

Konami Corp., a Japanese maker of casino gaming machines, said it’s in talks with possible partners to invest in gambling projects in Japan in anticipation the government will open up the market.

“We have met several companies” to discuss potential casino projects, Satoshi Sakamoto, chief executive officer of Konami’s gaming unit, said in an interview in Tokyo yesterday, without giving names.

There is a “possibility” that the company would team up with clients such as Las Vegas Sands Corp., MGM Resorts International and Caesars Entertainment Corp., Sakamoto said. Konami makes and sells gambling equipment such as slot machines to Sands and other casino operators, though it doesn’t break out how much revenue comes from each customer.

Casinos are banned in Japan, where betting on horse, boat and bicycle races is allowed. International casino operators have said they are ready to invest billions of dollars to build resorts in the country should the government legalize casinos.

Lawmakers are expected to discuss the law in the current parliament session which ends on June 22, though legislators supporting the bill said it would be tough to pass the law by next month. Japan’s ruling party and business leaders including Lawson Inc. Chairman Takeshi Niinami have promoted casinos as a tourism-boosting complement to the 2020 Olympics in Tokyo.

Konami will set up a subsidiary to invest in casino projects once the Japanese parliament passes the bill to legalize casinos, it said in a statement posted on its website yesterday. Japan is projected to be Asia’s second-biggest casino gambling market after Macau, according to CLSA Ltd.

The machine maker rose 0.8 percent to 2,371 yen at the close in Tokyo trading. The benchmark Topix index gained 0.2 percent.

Konami, which also makes video games and pachinko machines, reported a 27 percent increase in sales at its casino-equipment business to 31.6 billion yen ($311 million) for the year ended March. The business accounted for about 15 percent of the group’s total.

Before it's here, it's on the Bloomberg Terminal.