Melco Resorts Still Interested in Japan, But Ho Isn’t Married to Yokohama

Posted on: March 1, 2021, 09:22h. 

Last updated on: March 1, 2021, 11:48h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Melco Resorts & Entertainment continues expressing interest in developing an integrated resort in Japan. But Chairman and CEO Lawrence Ho appears non-committal regarding Yokohama.

Melco Japan
Melco Resorts Chairman and CEO Lawrence Ho, seen here. His company is still interested in Japan but didn’t comment directly on Yokohama. (Image: South China Morning Post)

On the company’s fourth-quarter earnings conference call last week, Ho discussed his company’s Japan ambitions. But he steered away from comments on the country’s second-largest city.

While the process in Japan has been delayed and remains complex, it has renewed momentum, as jurisdictions again initiating request for concept (RFC) processes,” Ho told analysts and investors.

Yokohama is officially in the running to procure one of the first three gaming licenses in the Land of the Rising Sun. Operators have until May 17 to submit bids and officials there expect to announce a winner this summer.

Reading Melco’s Japan Tea Leaves

With Yokohama not being directly mentioned on the Melco conference call, some market observers may infer that’s another blow to the city’s ambitions of becoming one of Japan’s gaming hubs.

Last month, Wynn Resorts scrapped its plans in the city. That news emerged months after Las Vegas Sands, which was believed to be focusing on Yokohama, pulled the plug on its Japan ambitions. Those decisions pared what was once an expansive field of contenders for a license in the city.

Until recently, it was widely believed that Galaxy Entertainment, Genting Singapore, and Melco were still interested in Yokohama. All three are among the premier operators of upscale Asia-Pacific gaming venues, a trait favored by Japanese officials. That says the potential loss of Melco from the Yokohama bidding process would be viewed as bad news.

Last month, an unidentified operator advanced past the city’s pre-qualification stage to the request for proposal (RFP) round.

Ho Likes Japan But Committed to Pragmatism

Melco’s leader remains enthusiastic about Japan’s future as the next great Asian gaming center. But he emphasizes that patience will be a virtue regarding the company’s plans there.

“We remain convinced that Japan represents the best potential new gaming market globally,” said Ho. “At the same time, we remain patient and will maintain our disciplined approach with respect to all development activities, including Japan.”

That reserved approach is warranted because building an integrated resort in the Land of the Rising Sun will be pricey. Estimates vary, but in the oft-cited estimates of $10 billion to $15 billion for a single, plush gaming venue, a Japanese casino property will be the most expensive of its kind on record.

Still, Melco possesses some advantages when it comes to winning in Japan, should it choose to pursue objectives.

“Our focus on the Asian premium segment, a portfolio of high-quality assets, devotion to craftsmanship, dedication to world-class entertainment offerings, market-leading social safeguard systems, established track record of successful partnerships, the culture of exceptional guest service, and a continuing commitment to employee development puts Melco in a strong position to help Japan realize the vision of developing an exceptional IR with a uniquely Japanese touch,” said Ho.