Long-running pursuit of a Japan casino resort license
Global casino company Las Vegas Sands Corporation has said it is still very keen on obtaining one of three casino resort licenses being offered in Japan. It plans to be smart in its expansion efforts, as a significant investment will be required if it is successful in its license bid.
CEO, chairman, and founder of Las Vegas Sands, Sheldon Adelson, spoke about how the company is
aggressively pursuing additional development opportunities in new markets, including Japan.”
Commercial casinos in Japan have been legal since 2016, with resort casinos getting the green light in summer 2018. Once Las Vegas Sands’ opportunity is prudent and offers acceptable returns, the company will still be in the hunt for a license.
Significant investment will be needed
The chief operating officer and president of Las Vegas Sands, Robert Goldstein, said an investment of $10bn would just be the starting point if the company obtains a resort casino license. He added that he does not believe “anybody is going to do it for less…unless you’re going to do something subpar.”
the priciest development in the history of the company
If such a project goes ahead, it would be the priciest development in the history of the company. It cost just $1bn for the company to build the Venetian in Las Vegas twenty years ago.
For the Japan expansion plan, 65-75% of the cost would be paid for through project financing. The remainder would come via equity.
Potential location for Las Vegas Sands casino in Japan
While the locations for the three resorts have yet to be decided, Osaka is one of the strong favorites. Las Vegas Sands had its eyes on an Osaka license for some time, before suddenly doing a u-turn in August. Instead, it will be looking at a potential license in Yokohama and Tokyo.
According to Goldstein, these alternative locations would be a “better fit for our skill set” than Osaka, despite it being a wonderful market.
The company’s strengths are catering for the mass-market casino customers, as well as the likes of conferences, exhibitions, and meetings.
Ongoing plans in Macau and Singapore
Las Vegas Sands already has casinos in both Singapore and Macau, two lucrative gambling markets in Asia. Adelson has emphasized that the company is very bullish about its future prospects for growth in the region.
The company’s Macau casino is adding on two million square feet of luxury accommodation over the next year, through the Londoner Tower and the Grand Suites at the Four Seasons Macao. Over the next couple of years, it will also look to add further non-gambling entertainment and tourism amenities at the Londoner Macao.
Earlier in 2019, the Marina Bay Sands casino in Singapore got its license extended until 2030. The company will now invest $3.3bn in expansion projects there in return for this license extension. The construction of a fourth tower will see the suite capacity of the resort growing by 40%.
Drop in revenue for Las Vegas Sands in Q3
Las Vegas Sands’ ongoing plans for the expansion in Asia were announced during the recent earnings announcement for its third quarter. Goldstein announced a revenue drop of 3.6%, falling to $3.25bn for the period, which led to a 3% drop in the company’s EBITDA down to $1.25bn.
The announcement also saw Adelson take part in an investor relations communication of its kind for the first time since October 2018. The 86-year-old billionaire has been battling non-Hodgkin’s lymphoma since the start of the year.
