New Crown Resorts shareholder Melco Resorts became one of seven license applicants for an Osaka casino license. Lawrence Ho, the owner of Melco Resorts and Entertainment, once said he would spend “whatever it takes” to win a Japanese casino license .
Investment research firm Sanford C. Bernstein Ltd wrote of Melco’s odds of winning a casino license: “While Melco will utilize some debt capacity to fund its share purchase, we do not see this as an impediment in Melco’s Japan bid. In fact, owning an Australia operation may help enhance Melco’s standing in the bid process.”
Lawrence Ho might have to prove his assertion about spending whatever it takes to win the bidding process. The ultimate price of an Osaka casino resort to be US$8 billion to US$10 billion, whether Melco or somone else wins the prize. The list of applicants reads like a who’s who of casino giants. Las Vegas Sands Corp, the largest casino company in the world, applied for an Osaka casino license.
So did Genting Group, the Malaysian multinational conglomerate. Genting owns oil platforms and rubber plantations in addition to its string of casinos and hotel-resorts around the globe. It most famous brand is Resorts World, which has casinos in Singapore, Philippines, Las Vegas, and New York.
Genting also owns Crockfords Casino in London — the casino which sued American poker player Phil Ivey over his baccarat winnings.
Las Vegas Sands and Genting are only two of the massive competitors. Wynn Resorts and MGM Resorts — a pair of the titans of the Las Vegas Strip — each submitted a license. MGM Resorts even partnered with Orix, a Tokyo-based real estate development firm, for its Osaka bid.
Besides owning world famous resorts like MGM Grand, Bellagio, and Mandalay Bay on the Las Vegas Strip, MGM Resorts owns Borgata in Atlantic City, MGM National Harbor near Washington DC, and MGM Springfield in Western Massachusetts. It also owns MGM Macau and MGM Cotai in Macau.
Wynn Resorts is famous to Aussie gaming news readers because it briefly made a bid for a Crown buyout two months ago. Almost immediately, Caesars withdrew the bid offer. Like MGM Resorts, Wynn Resorts has two integrated resorts in Macau: the Wynn Macao and the Wynn Palace.
The Las Vegas Strip gaming company went through a tumultuous 2018, because its founder and CEO left the company due to a scandal. After the Wall Street Journal published a story alleging sexual misconduct and sexual harassment by Steve Wynn, the 77-year old casino mogul and RNC Finance Chairman retired.
Wynn’s board’s conduct over the years drew fines of $20 million from the Nevada Gaming Commission and $35 million from the Massachusetts Gaming Commission. Despite its leadership issues, the Wynn Resorts brand is strong. The company is valued over $17 billion and it share prices outperform most of its competitors. Given its PR issues, Osaka might have better options, though.
Galaxy Entertainment Group (GEG) also submitted an application. The Chinese gaming group owns the Starworld Resort, the Galaxy Macau, the Broadway Macau, and the CityWorld casinos in Macau. GEG also is planning a multi-billion dollar casino resort in Boracay Island in the Philippines, though President Rodrigo Duterte doesn’t seem to like the idea.
The Lui Family of Hong Kong owns a controlling share (50.3%) of Galaxy Entertainment Group. With revenues from their Macau holdings and a huge database of Chinese mainland players, GEG can make a strong bid for an Osaka casino.
An “Osaka local alliance” is the seventh bidder. Little is known about this group, but it would be a mistake to dismiss the bid. Japan has its own business ethos and its own outlook on outsiders, so a local bid could be a winner.
Japan isn’t the only country with that attitude. Australian officials have a territorial attitude toward foreign competitors. The fact New South Wales officials plan a year-long review of Melco’s investment in Crown Resorts is a sign that domestic partners are preferred.
In fact, it’s more common than one would think. When New York state licensed four casinos in 2014, it preferred local bidders over the national and international casino giants. Genting Group and Caesars Entertainment each had failed bids for Orange County. Meanwhile, local bidders like Del Lago, Rivers Casino in Schenectady, and Montreign won licenses. Tioga Downs, a local racetrack, won the fourth license.
It is a surprise that Caesars Entertainment did not make a bid. Caesars’s departing CEO, Mark Frissora, made several trips to Japan to discuss an Osaka casino bid. The company even hired former Nevada Gov. Brian Sandoval as a lobbyist for its Japanese casino bid.
Caesars owns the largest number of domestic casinos in the United States, including Caesars Palace and the Rio All-Suite Hotel and Resort. Caesars also owns casino brands like Harrah’s, Bally’s, and Horseshoe. On the downside, it is emerging from a long and bitter bankruptcy reorganization.
The recent history of bankruptcy and the intense competition might have caused Caesars to shy away from the Osaka casino license. An impending buyout or merger with one of the other license applicants also might have caused hestitation. A third option is Caesars might be focusing on the Wakahama or Nagasaki bids.