According to Bloomberg, Caesars Entertainment Corp. will not pursue a license for a casino in Japan, choosing instead to stick with their current business plan and focus on next year’s upcoming $17.3 billion merger with Eldorado Resorts Inc.
The company recently released a statement in Japan saying it will no longer continue its application to obtain a license to build an integrated resort in Japan.
Caesars management said the reasons behind this decision had to do with a certain sensitivity towards the Japanese government and business partners, who must make decisions this year to advance the casino process, Chief Executive Officer Tony Rodio said in a statement.
“As Caesars has pursued a license to operate in Japan over many years, we have been treated with respect and goodwill by Japanese government, business and community leaders, and with kindness, by all the Japanese people we have encountered during this journey,” Caesars Chairman Jim Hunt said.
Everyone wants a bite of what could be the second-largest gambling market in Asia
The Japanese market has been the talk of the industry, casino operators all over the world have been dreaming to open resorts in Japan, which could become Asia’s second-largest gambling market after Macau, China.
Caesars, the largest owner of casinos in the U.S., was not able to get a license to operate in Macau, the biggest casino market in the world. The company has been struggling with a large debt load taken on after a 2008 leveraged buyout.
Financier Carl Icahn took control of the Las Vegas-based company and made the $8.6 billion sale to Eldorado possible, thus saving the company.
The country’s gaming market is estimated to be worth more than $25 billion a year once the resorts open.
The Japanese government has given preliminary approval for what is expected to be three major resorts. Formal proposals for concept casinos will be presented in Osaka next month. Cities are meanwhile formalizing their bidding processes.
A casino in Japan is expected to cost upwards of $10 billion, with the government’s intended focus on generating tourism and convention revenue from adjacent hotels and meeting space.
A 15-year-long interest comes to an end for Caesar’s
This decision to leave the race for a Japanese casino puts an end to a 15-year-long dream for Caesars Entertainment Corp.
The company has been working towards this for years. It was an opportunity they did not want to miss; Caesars first began supporting the Japanese integrated resort discussion more than 15 years ago, according to its website.
In 2014, Caesars promised the Japanese a $5 billion resort if they were given the chance to build in Japan. In September 2018, they announced a “100 Year Partnership for Japan” campaign, trying to give Japan a sense of what their presence in the gambling business could be like.
Waiting for the legal process to be done, they were investing in their future Japanese dream, sponsoring esports events, in an effort to show authorities and the Japanese people this could be just the start of a beautiful IR future.
All this is a dream of the past now for Caesars because the IR license competition remains very crowded. Even with Caesars out of the way, and the number of licenses expected to be available remains low.
Other contenders have a clearer path to the prize
Caesars is getting out of the race just when things were expected to become easier, now that legal issues are coming to an end. In recent years, Japan has passed laws that legalizing casino gambling and compiled conditions under which companies could build gambling resorts.
The delays have been in the last processes needed, mainly the appointment of a casino control commission and the release of guidelines on how operators are to be chosen. Operators and local municipalities are currently only waiting for the government to decide on these two issues.
There are signs the process is not going to take long now.
Last week, Yokohama, located about 30 minutes south of Tokyo, formally made public that it wants to make proposals for an integrated resort to be built on its Yamashita Pier.
Important operators such as Las Vegas Sands, Wynn and Galaxy Entertainment Group Ltd. came out, right after the announcement, with statements praising the move and expressing their interest in building in Yokohama.
Other Nevada-based companies — Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts Ltd. — are all interested in investing in Japan.
Sands has said they wanted to build in Tokyo or Yokohama, while MGM CEO Jim Murren said the company is committed to pursuing an integrated resort in Osaka.