Is Once Ambitious Japan's IR Project Falling Apart?Published August 20, 2020 by Lee R
High profile dropouts and Covid-based revenue disruptions among high profile private partners are stalling the IR movement in Japan.
The once ambitious Japan IR movement is stalling in the wake of Covid.
Changing the Schedule
The realization comes on the heels of Japan Minister of Land, Infrastructure, Transport and Tourism
Kazuyoshi Akaba's announcement of impending “changes to the timetable regarding casino resorts in the country.”
The IR Regions
Originally scheduled for between January and July of 2021 the IRS were targeting four locales in Japan: Yokohama, Osaka, Nagasaki and Wakayama; however the virus caused delays in proposal (RFP) applications for a government already generally reluctant on publishing IR policy, leaving local governments and partners to wait until the first half of 2021 to apply for casino-building licenses.
Covid-related disruptions to the private sector have precipitated dropouts from prominent partners in the regional movement already, led by Las Vegas Sands departure from the Yokohama's IR in May, and with Wynn re-exiting soon after.
The Sands departure definitely could affect perceptions of investability in Japan's IRs.
The decision came directly from founder billionaire Sheldon Adelson, a close ally of US President Trump. The pullout underpins general concerns about IRs, and the availability of contributions of significant investment that are needed after the Covid revenue disruptions.
Losing the Adelson Factor
This renders the unique licensing requirements for the Japan jurisdiction all the more challenging, with Adelson formerly a central figure.
Adelson actually proved to be one of the driving interests in granting Japan's first three IR licenses. Reports had Japanese Prime Minister Shinzo Abe and Trump meeting with Adelson in Washington on it in February 2017, with Adelson attending a breakfast with Abe and other American CEOs.
The news of delays offset the key date of July 30, 2021, in Japan, according to Tokyo-based Bay City Ventures Managing Director Joji Kokuryo:
“Assuming that travel restrictions are eased enough within the next two months, there is just enough time for local governments to select their IR partner and come up with a reasonably sound business plan to submit to the central government” said the casino expert in an April interview.
Meeting that selection process date with fully educated prospective partners prepared to work effectively with the Japan government remains a barrier that has been delayed again.