Sands' Adelson Sees Japan as Ultimate Business OpportunityBy and
Japanese casino resort seen costing $6 billion to $10 billion
Resort by Sands would focus on conference, exhibitions market
Japan is the ultimate business opportunity for Las Vegas Sands Corp., said its billionaire chairman as he envisions an integrated resort that would attract convention tourism and boast a record number of slot machines.
“Singapore was a warm-up to this,” Sheldon Adelson, who’s also chief executive officer, said in Tokyo Tuesday. A potential resort in Japan will probably cost at least $6 billion, similar to Marina Bay Sands in Singapore, and could be as much as $10 billion, Adelson said in a speech at a CLSA Ltd. conference.
The resort in Japan, which passed a bill to legalize casinos in December, would feature 10,000 slot machines, the 83-year-old gambling tycoon said, the most of the Las Vegas-based operator’s properties anywhere, and four times more than in Singapore.
Sands, along with Wynn Resorts Ltd and MGM Resorts International, are among operators that expressed interest in building resorts in Japan. Opening two integrated resorts in major population centers could bring in $10 billion in revenue, with potential for $25 billion if they spread across the country, according to CLSA.
Sands’s shares are down 2.6 percent in New York trading this year, compared with the 5.7 percent gain in the Standard and Poor’s 500 Index. The stock was little changed Tuesday at $52.04.
Japan has a proven history of embracing wagering with consumers in the country already allowed to bet on boat, bicycle and horse races. Gamers also spent more than 23 trillion yen ($202 billion) on pachinko in 2015, compared with $25 billion in the horse-racing industry, according to the Japan Productivity Center. There are more than 10,000 pachinko parlors operating what are effectively ball-bearing-based slot machines that get around legal gambling prohibitions by paying off winners with physical prizes that can then be exchanged for cash at a different location.
“Gaming is part of the fabric of this country,” said Jay Defibaugh, a senior analyst at CLSA Securities Japan Co., told reporters in Tokyo. “It certainly is a tremendous opportunity.”
Sands, the world’s largest casino operator, is eyeing new growth areas even as its main market in Macau recovers from a two-year gambling slump.
A Sands Japan project, similar to the company’s integrated resorts worldwide, would see gambling take up less than 5 percent of its floor space, with the rest of the property focused on meetings, incentives, conferences and exhibitions, known as MICE, Adelson said.
“It’s the ultimate of business opportunities,” he said. “I can offer an emphasis on the exhibition market. It’ll be a wonderful place for MICE and gaming.”
— With assistance by Daniela Wei