American casino operator, Caesars Entertainment Corporation, has reportedly announced that it has pulled out of the process to secure one of a trio of coming Japanese casino licenses.
According to a Wednesday report from the Las Vegas Review-Journal newspaper, the giant firm was widely considered to be a frontrunner in the race to bring Las Vegas-style gambling to Asia’s second richest nation and had even been contemplating a number of probable sites including a 173-acre portion of Yumeshima Island near the metropolis of Osaka.
However, the newspaper reported that these plans have now been scuttled as part of the Las Vegas-headquartered firm’s planned $17.3 billion acquisition by fellow Nevada operator Eldorado Resorts Incorporated owing to concerns over how much it could eventually cost to build and operate an integrated casino resort in Japan.
The Las Vegas Review-Journal reported that Caesars Entertainment Corporation’s prospective new owner may also have expressed anxieties about the uncertain returns any such Japanese development could hope to attract. The newspaper detailed that this is despite the widespread belief that the nation’s casino market is set to become the second most lucrative on the planet behind only Macau with aggregated annual revenues of in excess of $25 billion.
In an official Wednesday statement, the Chief Executive Officer for Caesars Entertainment Corporation, Tony Rodio, declared that the timing of his firm’s decision had been driven by ‘sensitivity to the significant decisions Japan’s government and business partners will likely be making later this year to advance the process.’ But, Brendan Bussmann from casino consultancy firm Global Market Advisors purportedly told the newspaper that the operator’s decision seems premature considering that the island nation has yet to pass legislation to establish either a regulatory structure or supervisory body.
“There’s a lot of game to be played here still. It’s really disappointing to see them pull out of a market they put so much time and effort into. Having the global branding they do would’ve resonated well here [in Japan].”
It was further reported that a trio of American firms encompassing Wynn Resorts Limited, MGM Resorts International and Las Vegas Sands Corporation are still involved in the race to bring casino gambling to Japan. Bussmann purportedly explained that these firm’s odds could be helped by the fact that they are all licensed by regulators in Nevada, which is considered to be one of the world’s most honest gambling jurisdictions.
“At this point, you’ve got three good American operators that have all shown interest in Japanese markets. Japan has made it clear that it wants a good and clean operator. Nevada’s regulatory structure allows for that. They have a leg up for anyone else in the market.”