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Hard Rock emerging in Japan’s casino market as a dark-horse

  • May 1, 2018
  • , p. 70 - 73
  • JMH Translation

An agreement was reached much sooner than expected. The ruling party’s working group agreed on the implementation legislation on integrated resort facilities featuring casinos. The LDP hastened to clinch a deal primarily because a dark-horse casino operator is looking to crack Japan’s casino market. Up till now, Las Vegas Sands, MGM, Wynn Resorts Limited and the Genting Group have been rumored as leading candidates to operate casinos in Japan, but Hard Rock International, which operates 24 hotels and 11 casino facilities worldwide, has recently emerged as a new contender.

 

Edward Tracy visited Japan in November 2017, soon after he became chief operating officer at Hard Rock Japan. Previously, he was president and CEO of Sands China from 2010 and generated record profits in Macau. He made his mark in the gaming industry for over 30 years. In his stellar career, the most eye-catching job was a stint as president and CEO of the Trump Organization, a conglomerate affiliated with the Trump family. 

 

Tracy was said to have studied well Japan’s IR environment and emphasized the importance of community-building rather than casinos during his visit to Japan. People close to him anticipate that he may expand his reach to Hokkaido. The prefecture is attractive not only because of its vast expanse of land but also because the Shin-Chitose Airport is located on a North America-bound route via Alaska and is the closest airport for private jets from the U.S. to land. It is also easier to secure there a large tract of land compared with Yokohama or Odaiba. Thus far four Hokkaido municipalities have declared their candidacies to host a casino. The most promising among them is Tomakomai.

 

There is speculation that Hard Rock may ally with  Melco Resorts, led by the Ho family, which has established itself as the “king of casinos” in Hong Kong and Macau, to expand into Hokkaido. Given that Tracy once led Sands in Macau, a “U.S. – China partnership on Japanese territory” may take place in Tomakomai. Melco Chairman and CEO Lawrence Ho is positive about entering the Japanese casino market and will reportedly consider investing 1 trillion yen if casino construction takes place in a big city, but the Japanese side is worried about possible money laundering by China. But if Melco joins hands with Hard Rock, which has  connections with the Trump family, it would make it difficult for Japan to reject a Melco-Hard Rock bid.

 

Chinese Premier Li Keqiang is slated to visit Japan for the Japan-China-South Korea summit to be held in Tokyo on May 9. He is scheduled to tour Hokkaido on May 10-11. There is a growing suspicion that he may visit Hokkaido to check its suitability as a gateway to China’s “One Belt, One Road” initiative. (Abridged)

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