Melco Pledges to Spend ‘Whatever It Takes’ on Japan CasinoBy and
Osaka is Melco’s top pick due to city’s entertainment profile
Prefers to take majority stake in any casino partnership
Melco Crown Entertainment Ltd. has upped the ante against its casino rivals to win the chance to build a casino resort in Japan, declaring there’s no limit on how much the company is prepared to invest.
“This opportunity is priceless and we’ll spend whatever it takes to win,” Chief Executive Officer Lawrence Ho said in a briefing held Wednesday at a CLSA Ltd. conference in Tokyo. The billionaire said the investment amount will depend on the host city, and his top choice for a casino resort is in the city of Osaka, where Melco has done more planning.
Ho’s comments followed those of fellow casino tycoon Sheldon Adelson, who declared Japan as the ultimate business opportunity for his Las Vegas Sands Corp., and where he could spend as much as $10 billion building an integrated resort. Japan legalized casinos in December, drawing the interest of global gaming operators to a market CLSA predicts could be worth as much as $25 billion.
MGM Resorts International Chief Executive Officer James Murren, speaking at the same event, touted the Las Vegas-based operator’s size and clout in bringing in entertainers, and said it was hiring more staff to explore gaming options in Japan.
Melco’s Ho, whose father Stanley Ho is a Macau gaming legend who held the city’s casino monopoly for decades, took a dig at the design choices of operators in Las Vegas and in Macau, where four of Melco’s properties are located. Those won’t be a good fit for Japan, he said.
“If you put up some of the tacky buildings that you have in Las Vegas or Macau here it would look out of place. Can you imagine the Venetian here?” he said in a speech to investors at the CLSA conference. Sands, the world’s biggest gaming operator, has casinos in both cities that are named the Venetian.
Melco shares have gained 5.5 percent this year in New York trading, compared with the 0.5 percent drop in Bloomberg Intelligence’s index of Macau gaming stocks.
“It’s important we work with government authorities,” the 40-year-old Ho said. “Ultimately what makes an integrated resort successful is how we work with communities.” Hong Kong-based Melco would ideally want to own a majority stake in any tie-up with local partners, but the company would keep an open mind on the structure, he said.
Similarly, MGM prefers working with Japanese partners rather than have full ownership of a project, according to Murren.
Osaka “really has that fun element” and fits the entertainment profile that Melco is keen on, said Ho, whose company operates the $3.2 billion Hollywood-themed Studio City resort that opened in Macau in 2015.
Melco sees its role as helping expand Japan’s tourism, Ho said, adding that he’s “shocked” that the country attracts only about 20 million tourists a year. That’s compared with the 30 million who visit Macau, the Chinese city that’s also the world’s largest gambling hub.