Genting Joins Rivals with Japan Jitters

Posted on: November 15, 2020, 01:29h. 

Last updated on: November 15, 2020, 02:48h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Genting Singapore has long been one of the major gaming companies pursuing an integrated resort license in Japan. But the operator is appearing less devoted to the Land of the Rising Sun than it was in previous months.

In reporting third-quarter results on Saturday, the owner of Resorts World Sentosa, one of Singapore’s two gaming venues, commented on its plans in Yokohama, implying there are no guarantees.

As part of the group’s geographical diversification strategy, the group is keenly exploring the Yokohama integrated resort opportunity in Japan,” according to a filing. “We will evaluate the conditions for the Request-for-Proposal (RFP) and the investment environment when the formal bidding process begins and will respond with a proposal if these conditions meet the Group’s investment criteria.”

Previously, Genting Singapore’s typical response regarding Yokohama was that the company was staying abreast of developments in Japan’s second-largest city.

Rocky Period for Yokohama Continues

News of Genting perhaps having second thoughts about pursuing a Japan license extends what’s been a turbulent period in Yokohama’s efforts to become Asia’s next marquee gaming destination.

In terms of operators, some big names already said they’re abandoning or stepping back from Yokohama plans. Las Vegas Sands got that ball rolling in May with Chairman and CEO Sheldon Adelson criticizing costs and procedures involved with opening a high-end gaming property in Japan. Prior to that, Sands was widely viewed as one of the leaders to land one of the first three licenses in the world’s third-largest economy.

In August, Wynn Resorts said it’s closing its Yokohama office, citing the coronavirus pandemic and a desire to focus on its Macau operations.

A Blow if Genting Departs

Even if Yokohama leaders are able to quell opposition to the casino plans, the potential loss of Genting from the bidding fray would be a negative, particularly with Las Vegas Sands and Wynn out of the competition.

For starters, the operator has the resources to embark upon a costly addition to its Asia portfolio. It’s spending $3.3 billion to refresh Resorts World Sentosa.

Second, Japan policymakers are seeking to emulate the Singapore model of high-end, plush integrated resorts known for attracting well-heeled gamblers from other countries in the region. However, if Genting opts to bail, the operators of Singapore’s two casinos would be out of the competition.

If Genting ultimately abandons Yokohama plans, that would leave Melco Resorts & Entertainment in the catbird’s seat to win a license there, while MGM Resorts International remains the lone bidder for an Osaka permit.