Japanese Contenders

Who will win casino licenses in Japan?

The rules haven’t been written yet, but the race to win a Japanese casino license has begun. In the past month:

• Las Vegas Sands CEO Sheldon Adelson made headlines by saying he could invest $10 billion into a Japanese casino.

• MGM Resorts CEO Jim Murren likewise said he could invest $10 billion. MGM is also increasing its staff in Japan to 15 people within 30 days.

• Melco Crown released conceptual pictures of what its casino might look like.

• Genting Singapore expressed interest, suggesting it is the Genting subsidiary that will carry the ball in Japan.

• Hard Rock International CEO Jim Allen said he already has a list of up to 30 prospective Japanese partners ranging from manufacturers to financial firms to landowners.

Hard Rock expects it would own 40-60 percent of the project. The prize, as everybody knows by now, is a casino market estimated at up to $40 billion in gaming revenues.

What is not known are the important components of enabling legislation to be enacted later this year: How many casinos? Where? Tax rate?

Japanese Contenders How much and what kind of local ownership will be required? For years, casino companies have talked about maybe just two or three destination resorts in the biggest cities, like Tokyo and Osaka.

That would be fine for the big operators, allowing them to have a Singapore-like oligarchy.

But the political reality in Japan is that smaller metropolitan areas will argue that they should get a piece of the pie, especially if the intention is economic development.

Their rationale is that prosperous Tokyo and Osaka don’t need the help, but the declining regional metros do.

Japanese Contenders Local participation is a given. The question will be in what form.

Will Japan require local companies as equity partners? Will they require Japanese investors to be 50 percent or even major

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