Japan Casino Update

Time to clean out some of the links that have been piling up about casino gambling in Japan.


Casino Shares Spike on False Japan Rumor

Shares of Las Vegas Sands and Wynn shoot up on a rumor that Japan is about to legalize casino gambling. No one seems to know where the rumor comes from. In the end, it sounds like someone on an LVS conference call mentioned the then-upcoming Japanese election as possible progress on the casino gaming front in Japan. Except he got the date of the election wrong - July 24 instead of July 29. So on the 24th, it looks like someone spread a rumor about legalizing gambling to push up stock prices. Nice.


Wynn, Okada Pact May Thrive When Japan Allows Casinos

Steve Wynn turned to (Aruze Corp. Chairman) Kazuo Okada when the gambling magnate needed cash to fund his namesake Las Vegas casino in 2000. Now, Okada could be the ace up Wynn's sleeve in the Japanese businessman's home market.
...
Japanese Prime Minister Shinzo Abe's ruling Liberal Democratic Party lost control of the country's upper house in an election on July 29. That could slow down the passage of legislation because of political uncertainly, the 64-year-old Okada said. The LDP and its coalition partner still control the more-powerful lower house with a two-thirds majority and can override the upper house in cases of disagreement.

Not only did they get the date of the election wrong, they also messed up on which way it would go. The Democratic Party of Japan grabbed a lot of seats and wrecked the LDP majority of the upper house. The casino gambling proposition isn't strictly an LDP project as far as I know, but the unexpected DPJ win does throw a lot of uncertainty into things. They were hoping to pass this legislation by July 2008 - now the last I heard they're hoping maybe by the end of 2008.

Goddamn, all I want is casinos in Japan. Do I really have to start paying attention to Japanese politics just to get it?


Wynn, Aruze to Push Japan Casino Potential at Seminar

Wynn Resorts Ltd. and Aruze Corp. will promote the potential of casinos in Japan at a Sept. 11 seminar, as the companies seek to open the gambling market of the world's second-biggest economy.

Ronald Kramer, president of the Las Vegas-based casino company founded by billionaire Steve Wynn, will speak at the Tokyo seminar with Aruze Chief Executive Officer Kunihiko Yogo, according to a statement faxed from Tokyo-based Aruze to Bloomberg News.

I assume this seminar happened but so far I haven't seen any news about it. Maybe there wasn't anything newsworthy about it? I'll try to find out.

The last I heard was that if the legislation passes we may see casinos here open in 2012. But if the legislation isn't pushed through soon, I could see that being pushed back a year or two. Crap, I could be retired by the time they open up Wynn Japan.

I gotta get to Seoul one of these days. Walker Hill ain't exactly the Venetian, but it's a lot closer than Vegas.

More good signs

Found another couple of encouraging news articles recently on Japan opening up to casino gambling. Here's an AFP Article I found in a couple of places, but this seems to be the last place that has it still up.

The world's top casino operators are jockeying for a take in a vast but untapped market as Japan moves closer to an overhaul of its strict gambling laws to lure rich Asian tourists and boost its economy.

Japan would be a latecomer to a gambling boom across the region, which is looking to Las Vegas-style super casinos to entice more tourists, with two huge complexes springing up in Singapore to take on the Chinese enclave of Macau.

...

Almost half of the lower house of parliament -- including some opposition lawmakers -- supports the general idea of legalising casinos, said Toru Mihara, adviser to the LDP's casino study group.

"If we can create legal structures within one or two years to come, maybe in 2012 casinos in Japan will start to operate," he told AFP in an interview.

2012? That's five years from now! I mean, I'll take it, but I was hoping for something sooner. Can't you guys, you know, pass the law and then set up some converted warehouse casino for us degenerate gamblers for a year or two while they build the Wynn Tokyo? We're not that picky.

This article, however, paints a brighter picture.

Driven by fiercer regulation and a consumer credit crunch that has directly hit pachinko’s heaviest players, key segments of the industry are expected to contract by as much as 50 per cent over the next two years. Industry experts forecast that about a third of Japan’s 15,000 pachinko parlours — deafeningly loud, smoke-filled caverns where customers lose themselves for hours — may close.

But the imminent pachinko crisis will “vastly accelerate” plans by the Japanese Government to legalise casinos, one of the industry’s leading figures told The Times. To compete with Macau and other Asian cities where casino gaming is set for astronomic growth, Tokyo and other big Japanese cities may have their first Las Vegas-style casinos within three years.

Three years! Now we're talking!

I don't play pachinko, I don't get pachinko, so I don't know the market. But I doubt that hard core pachinko players are just going to up and quit the game because some of the big jackpot machines are outlawed. Likewise, pachinko operators and game manufacturers aren't going to just go, "oh well, guess we can't make those machines anymore. We'll go back to the old lower-payout machines and lose our customers." People can be very creative when they're trying to find a new way to separate you from your money. I don't know what they'll do, but I'm sure they'll do something to keep pachinko players relatively happy and spending their idle hours firing ball bearings up and watching them drop, hoping to make some money off of it.

The guy who made the quote is the head of Aruze, and a partner with Steve Wynn, so he stands to make a ton of money opening a casino here and filling it with his gambling machines. So he's not the most unbiased observer of the market. But I'll still be happy to see him right.

Japan Casinos (Revisited)

Nearly a year ago, I posted about the Japanese government investigating opening casino-style gambling in Japan. What's up with that?

Hell if I know. I haven't heard squat.

The investigatory committee came back and presented their report which apparently said about what everyone knew it would. Casino gambling would bring in a lot of visitors and tax dollars, and also help supporting businesses. But there were concerns about rises in crime in those areas, as well as possible involvement of organized crime groups.

Since then? Nothing.

Well, I'm not going to hold my breath waiting for the Japanese government to make a quick decision. On this issue or any issue. There could also be serious opposition to casino gambling behind the scenes by those companies that could stand to lose business to casino gambling - pachinko parlors and race tracks. I don't know about the tracks, but everyone assumes the pachinko business is controlled by the yakuza, so they might not be too keen on seeing casinos opened up if they can't get a share.

I just hope that eventually (sooner would be better than later), someone will decide to actually press the issue forward. Maybe after the Macau casinos continue to rake in money hand over fist. Maybe after the Chinese government reports on the extra billions of dollars they've added to their budgets from the casinos. Eventually will someone look at this and say, "Hey... we should get in on this."

The casino companies are also continuing to lobby, hoping to expand even further into Asia. Japan has a strong economy and they can spend money with the best of them when they get in the mood. Macau is still a bit too far away for all but the most serious of gamblers - at that distance, you might as well spend an extra couple hours on the plane and just head to Vegas.

Las Vegas Sands is lobbying to open casinos in Japan, I found in this article.

Las Vegas Sands is lobbying to introduce casinos in Japan and is mulling a development along the Mediterranean Sea, he says. ``I'd like to do another Las Vegas in Europe,'' he says, adding that it needs to be in a warm climate. ``We'll look aggressively for opportunities.''

"He" is Sheldon Adelson, and if he's successful in getting Japan to open up to casino gambling, he'll be my new best friend. I'd love to visit the Venetian in Tokyo. I wonder if my point card would work?

The MGM would also not want to be left out, according to this article. (Unfortunately it's not dated and it could be pretty old.)

According the MGM, they are not looking to stop at just two casino projects, especially if Japan passes its pro-gambling legislation. The revenue which Macau generated from its casinos already surpassed that of Las Vegas and it is turning to the most desirable place in the world for building a casino.

What about Steve Wynn? If Sheldon's trying to get into Japan, I'd have thought he'd be jostling with him for the chance to get in there first. It doesn't seem so in this article.

Wynn also noted that he and Japanese gaming device maker Kazuo Okada had agreed that neither would sell his shares without written consent from the other, and that each would have the first right to buy shares if the other wants to sell.

Each owns about 24 percent of Wynn Resorts shares, and each will make about $147 million from a special $6 per share distribution the company announced last week.

I expect Wynn to use the distribution to increase his stake in the company and take the combined Wynn-Okada ownership stake above 50 percent.

Wynn also said he had recently been approached by Australian publishing and gaming executive James Packer about possible Asian development opportunities. When I asked Wynn whether those opportunities might be in Japan, Wynn had a ready answer.

"No, I already have the best possible partner in Japan," he said, referring, of course, to Okada.

Actually, on rereading that, it reads like Wynn would of course stick with his current partners in Japan for any new casino deals, instead of taking on a new partner from Australia. Makes sense.

Anyhow, I just hope they get on with it. Let the casino companies in and start building up Odaiba to be the Macau of Japan, or else decide that they're going to stick with the current anti-gambling stance. At least then I could relax about it. This waiting is killing me.