Two U.S. billionaires are putting their bets on rival Japanese cities Tokyo and Osaka to be the first to open casino resorts. A powerful group of lawmakers have been pushing for the Japanese government to legalize gambling, and it seems only a matter of time before the law is passed, given the economic returns gambling could bring to Japan’s perennially struggling economy.
For Chicago real estate mogul Neil Bluhm and Las Vegas gaming tycoon Sheldon Adelson, there is huge potential in the fact that most industry observers see Japan as one of the world’s last untapped gaming markets. Some are even saying that once given the license by the Japanese government, Japan could potentially beat Las Vegas and rival gambling heaven Macau in terms of draw and profit, with annual revenues estimated at around USD$40 billion according to broker CLSA.
Bluhm has his sights set on the southern city of Osaka. The 76-year-old real estate magnate, who owns casinos in Pennsylvania, Chicago and Niagara Falls, has a net worth of USD$2.6 billion, and believes that Osaka has the kind of flexible local government that will help drive this project, which incidentally already has “shovel ready” casino sites ready to break ground. Adelson, four years Bluhm’s senior, hasn’t ruled out Osaka from his project list, but he has put his strength behind Tokyo Bay projects as his main target, given the capital city’s affluent 13.2 million population. Adelson is the CEO of Las Vegas Sands Corp, whose net worth Forbes marks at around USD$39 billion, and has pledged to spend USD$10 billion if and when Japan opens up to legal gambling.
Lawmakers who are pushing for the legalization of casino gambling hope to see initial draft legislation this year, with the first resort opening by 2020, when Tokyo hosts the Summer Olympics. Of the two cities, Osaka’s government is apparently more ready for foreign operators to create a large casino resort with convention and entertainment facilities. Tokyo, on the other hand, wants to take thing slow and sure. Industry executives worry that Tokyo is might be too focused on the Olympics that there will be little attention given to the casino issue. Tokyo Governor Yoichi Masuzoe, a former health minister, has yet to say whether he will seek a casino license for the capital or not. “We’re not like Osaka and Yokohama. We haven’t stepped on the accelerator and said let’s go,” Yukimasa Saito, an official at the governor’s office, said.
Comments Off on JDP Startup Corner: Pros & Cons of Working with a Partner in Japan