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American casino operators target Japanese markets

  • February 17, 2017
  • , Mainichi , p. 7
  • JMH Translation

By Kei Tsuchiya

 

The so-called casino bill (i.e. Bill Promoting Implementation of Specified Integrated Resort) was enacted on December 15, 2016. Matt Maddox, president of leading casino operator Wynn Resorts, visited Japan in search of business partners to penetrate the Japanese market. His casino development presentation was well received by major financial institutions and trading companies. Maddox received news of the casino bill passing while he was in Japan. “We have a common goal with Japan,” he enthused.

 

The main market development strategy for American casinos is to cultivate the Asian market, including Japan. Recently, giants like Las Vegas Sun and Wynn have started operations in Macao and Singapore. This is due to the declining popularity of U.S. casinos, triggered by the Lehman crisis in 2008. The revenue of the casino business in Las Vegas, the casino capital of the U.S., peaked in 2007 at 6.5 billion dollars (740 billion yen), whereas revenue in 2016 was 5.8 billion dollars. The casino industry is looking for new growth markets.

 

CES, a global consumer electronics trade show, was held in Las Vegas in early January. The five-star hotel Aria was packed with exhibiting companies and the press by day; giant casinos entertained the participants by night. Soft lighting and lively music greet incoming guests as they walk on plush carpeting toward rows of card tables and slot machines. “The maximum bet limit for this table is a thousand dollars,” the dealer says with a smile as he encourages people to play. Regular clients are invited to stay in the hotel’s penthouse suite, free of charge.

 

Although casinos are at the core of Las Vegas businesses, they make up less than 10% of the real estate footprint, overshadowed by the massive theaters, shopping malls, restaurants, conference centers, and meeting rooms. According to surveys conducted by the state of Nevada, non-casino revenue, such as hotels, merchandise, and theater shows, is growing steadily. Last year’s figure was 11.2 billion dollars, almost double that of casinos.

 

Leading casino firms hope to capitalize on this trend in the Japanese market, by exporting integrated resort packages, including casinos, hotels, merchandise, and theaters.

 

Last May, a major casino operator called MGM Resorts hosted the first-ever Kabuki performance in Las Vegas, where Somegoro Ichikawa danced to a shamisen accompaniment. This invitation showed the operator’s eagerness to enter the Japanese market.

 

MGM established its Japanese branch in 2014. “We want to jointly invest 9.5 billion dollars (one trillion yen) in Osaka, Yokohama, or Tokyo, with our Japanese partners,” says Ed Bowers, MGM’s senior vice president for global gaming development.

 

There is a deeply seated disdain towards casinos in Japan that comes from the fear of gambling addiction. Despite this national antipathy, policymakers are quietly taking steps to allow casinos in Japan.

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