Caesars’ Mark Frissora Visits Japan’s Proposed Casino Sites
Caesars Entertainment CEO Mark Frissora and his senior management team visited Japan this week. The Caesars Entertainment executive staff visited the cities of Tokyo and Osaka.
While making his visit, Mark Frissora announced Caesars would allocated 25 million Yen to responsible gaming causes in Japan. Frissora also spoke about his companies plans to develop an integrated casino-resort in Japan.
Japan plans to offer licenses to multiple international casino companies, which are expected to partner with domestic Japanese companies in developing casinos. The details for Japan’s casino industry are still uncertain. Tokyo, Osaka, and Yokohama have been discussed as potential casino sites, while some plans call for casino development in the outlying islands of Japan.
Regulatory oversight is also uncertain. Some plans call for strict oversight over Japanese casinos, including plans that could limit Japanese gamblers’ visits to the casinos. Depending on the type of regulations, gaming analysts have estimated Chinese and American casino companies will invest $5 billion to $10 billion in Japan’s casino industry. If the full potential was reached, analysts believe Japan’s casino industry could generate as much as $25 billion a year — and tremendous revenues for Japan’s government.
Japan Advisory Committee
Recently, Mark Frissora announced a 3-member Japan Advisory Committee to help with obtaining a Japanese casino license. The advisory committee includes former US Senate Tom Daschle, former US Trade Representative Charlene Barshefsky, and Kara Bue of Armitage International. Tom Daschle served as both the Senate Majority Leader and Senate Minority Leader in his 18-year career in the U.S. Senate. He was an early supporter of Barack Obama and a key advisor in Obama’s 2008 presidential bid.
Charlene Barshefsky, who works with the Wilmer Cutler Pickering Hale and Dorr law firm and is an advisor at Moelis & Company, negotiated China’s entry into the World Trade Organization (WTO) in the late-1990s. Armitage International is a business consulting firm out of Arlington, Virginia. Armitage is involved in international business development, problem solving, and strategic planning.
Steve Tight, Caesars’ President of International Development, said at the time the committee was announced, “We are thrilled to welcome such a distinguished and experienced group of global leaders to our team. Caesars has a proud legacy of delivering remarkable entertainment experiences while focusing on responsible gaming and economic development. We are glad that Senator Daschle, Ambassador Barshefsky, and Kara Bue are helping us bring this experience to Japan should we be fortunate enough to earn a license.”
Frissora’s ICE Gaming Speech
Last month at the ICE Gaming convention in London, Mark Frissora delivered a headliner speech in which he called for Caesars and other gaming companies to embrace innovation and change. Frissora said, “Don’t be the last dinosaur: Fresh thinking in gaming to win over new customer bases.”
Frissora pointed to the need to embrace rapid technological advancements, increased competition, regulatory changes, demographic shifts, and changing consumer preferences in building towards the future. The speech was hailed as a template for Caesars’ attempts to woo millennial customers to its casinos on the Las Vegas Strip and beyond.
This year, millennials are set to surpass the Baby Boomer generation in spending power. Already, the generation which came of age after the turn of the millennium is the largest generational demographic in the United States. The millennial generation also is infamous in the casino industry for disliking the industry’s biggest money generator — slot machines. In fact, millennials are less interested in gambling in general than previous generations.
In the speech, Mark Frissora cited Caesars’ plans to generate non-gaming revenues. He noted non-gaming revenues were 55% of the company’s revenue stream in 2016, up from 43% previously.
Caesars’ Japanese Casino Model
While Frissora was speaking about his company’s American business ventures, it could have been targeted at the Japanese lawmakers tinkering with the details of the IR Bill. Japanese politicians and residents alike have expressed concerns about the social problems that land-based casinos might cause to their society. They have discussed restrictions that could hamper Japanese casino operators.
In that light, a casino company willing to focus on non-gaming revenues at its integrated resort might have a special appeal to decision makers in Japan. An integrated resort incorporates several forms of business, including leisure in the form of hotels and spas, retail outlets, restaurants, nightclubs, concerts and live shows — and other attractions, such as museums, theme parks, theaters, and exhibitions. In such a resort, casino gambling is a profitable revenue stream, but one of many. The idea is to diversify revenue generation, while drawing a wider base of visitors — often a dedicated gambler and their family.