Billionaire Sheldon Adelson is willing to bet $10 billion that his Las Vegas Sands will become the leader in casino gambling in Japan, an offer he says his competitors can’t match. What remains to be seen is whether one of the world’s last great untapped gaming markets is willing to bet on him.
For months, the chief executive of the world’s largest casino operator by market value has insisted he’s the person to beat in Japan as it moves closer to legalising casinos, with parliament expected to start deliberating an initial bill in May.
Adelson’s aggressive, go-it-alone strategy is, however, worrying lawmakers and businessmen who want domestic firms to play a significant role in any casino business. At the same time, rival operators including MGM Resorts International and Wynn Resorts and local firms like slot machine maker Sega Sammy Holdings are also gunning hard for the few licenses expected to be up for grabs.
“I think this process will be so extraordinarily clear, transparent, deliberate and organized that no amount of early pioneering will carry the day,” James Murren, chief executive of MGM Resorts, told Reuters in an interview.
Adelson apparently disagrees.
In October, he told investors that anyone, including politicians, would agree that Las Vegas Sands was in the pole position, according to a transcript of an earnings call.
A month later, he gave a spirited presentation to Hiroyuki Hosoda, a heavyweight in the ruling Liberal Democratic Party and head of an intra-party group promoting the casino bill. Adelson went through slide after slide, some with mock-ups of what his resort might look like on Tokyo Bay, according to a person who knows what happened at the meeting.
At the end of the pitch, Hosoda offered Adelson some advice, the person said. Hosoda told Adelson that Tokyo had its own culture, and just replicating the type of complex Las Vegas Sands built in Singapore wouldn’t necessarily work.
It was a gentle reminder that the government would have a say in what was built and by whom. It also reflected general concerns about Adelson’s openness to local involvement, the person said.
Adelson did little to dispel these concerns at a media briefing in Tokyo this week, saying he would prefer not to take on equity partners. He also questioned the ability of the Japanese companies interested in casinos to take on the scale of risk required for the massive complex he wants to build.
“No one is talking about implementing foreign capital restrictions but many lawmakers in the casino group want Japanese companies to have the opportunity to invest. They want to make sure some money stays in Japan,” the person said.