America news site ProPublica reports that, during a January 2017 meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, Pres. Trump personally endorsed Sheldon Adeloson to the Japanese government on the issue of casino licensing. If the ProPublica story is correct, then Donald Trump used his influence as US president to pressure the Japanese government to give his friend Sheldon Adelson a license worth tens of billions of dollars.

Of course, Sheldon Adelson is more than a Trump friend. Adelson also contributed more than any other donor to Donald Trump’s 2016 presidential campaign. It was Sheldon Adelson who famously snubbed Sen. Ted Cruz at the 2016 Republican National Convention. Sheldon Adelson was on Trump’s inauguration committee.

Jordan Libowitz of the US watchdog group, Citizens for Responsibility and Ethics in Washington, said of the alleged Trump meddling, “While there are times that it is appropriate for the president to promote business interests, it must be for the benefit of the American people, not his personal relationships.”

“President Trump’s blurring of the line between the administration and his personal interests casts a shadow on of doubt on these activities.”

Japan is in the process of implementing the Integrated Resort Bill and will hand out 3 casino licenses over the course of 2019. Las Vegas Sands Corp, the casino company owned by Sheldon Adelson, is set to be one of the top license applicants. A couple of years ago, Adelson said he was willing to invest as much as $10 billion to secure a Japanese casino license.

As the world’s third largest economy behind the United States and China, many believe the Japanese casino industry also will be the third largest . The licenses for Tokyo, Osaka, and Yokohama (or perhaps Chiba) will be well worth the expense.

Fierce Competition for Casino Licenses

The problem is, all the other major global casino companies also know that. MGM Resorts has said it will spend as much as $10 billion for a Japanese casino. Lawrence Ho of Melco Resorts, a massive Chinese casino company based out of Macau, said he would spend whatever it takes“.

The competition does not stop there. Caesars Entertainment, the largest US casino company, is now two years out of a bankruptcy battle and prepared to mount a bid for a Japanese casino license. So is Galaxy Entertainment Group (GEG), the largest Chinese casino operator, which plans to submit a license application.

Japanese gaming machine manufacturer and international casino operator, Sega Sammy, also plans to bid. Universal Entertainment Group, like Sega Sammy a Japanese manufacturer of pachinko machines and (unlike Sega Sammy) a major operator in the Philippines, also might submit an application.

Japanese Casino License Process

It is possible that Sega Sammy and Universal Entertainment might partner with a foreign casino company on a bid, but that is not necessarily the case. Somewhere between 5 to 7 giants of the global casino industry are interested in 3 casino licenses — and others might get involved.

Each of the license applicants has massive resources. Each is going to seek ways to stand out from the crowd. Melco Crown announced it would install the MelGuard facial recognition technology system in its casino, as a way of enhancing Japan’s already stringent regulations for Japanese residents who gamble in casinos.

Caesars Entertainment has sponsored major cultural festivals, hoping to win the favor of local officials. Japanese decorum states those officials cannot discuss business with such executives.

Why Trump’s Endorsement Is Bad

In such an environment, having the president of the United States endorse your casino bid is a massive advantage. When Donald Trump was elected president, Prime Minister Shinzo Abe made certain he was the first world leader to visit with the president-elect.

The US alliance is essential to Japanese foreign policy, especially in light of the growing nuclear threat from North Korea and the economic rise of China. It is not hard to believe Donald Trump’s word will hold tremendous sway with the Japanese officials who award a casino contract. They might not accede to his request, but Trump stating his opinion puts undue pressure on them to do so.

A number of problems stem from such interference. If Japan chooses Sheldon Adelson’s bid now, the story will be they bent under Donald Trump’s influence. Las Vegas Sands Corporation is the biggest casino company in the world, so it has the resources to make the highest bid, but now the process will look tainted if LVS wins a license.

Apollo Global’s Ties to Jared Kushner

Caesars Entertainment has it own conflict-of-interest concerns. Caesars is owned by two private equity firms, Apollo Capital and TPS Global Capital. Earlier this year, it was reported that Apollo’s executives met with Donald Trump’s son-in-law and White House advisor, Jared Kushner. Not long after, Apollo approved a loan of $180 million to Kushner.

Its executives claim no quid pro quo was involved, but in the United States, one’s willingness to believe that pledge depends on one’s political affiliation. Outside the USA, few would believe Apollo got nothing for such a loan, which helped Kushner keep his troubled Manhattan skyscraper, 666 Fifth Avenue, afloat until the Chinese government bought the high rise off Kushner’s hands.

China’s Casino License Applicants

Speaking of the Chinese government, will the two Hong Kong-listed Macau-owned casino companies receive backing from the Chinese government? In a bid for prestige, will President Xi Jinping pick Melco or Galaxy Entertainment as his favorite and endorse it to the Japanese government? Perhaps that would be unthinkable, but if one national leader endorses a casino to the Japanese government and wins approval, is it so outrageous that another leader might?

ProPublica’s report said that Shinzo Abe and his team were taken aback by Trump’s forwardness, but Abe tried to deflect the request. The ProPublica report stated:

“It was totally brought up out of the blue,” according to one of the people briefed on the exchange. “They were a little incredulous that he would be so brazen.” After Trump told Abe he should strongly consider Las Vegas Sands for a license, “Abe didn’t really respond, and said thank you for the information,’ this person said.”

Previous US Presidents and Japan

Sheila Smith, a member of the Council on Foreign Relations who happens to be a Japanese diplomatic expert, said this would not be the first time a US president backed a US company to Japanese leaders. Smith said, “President Bush famously took a group of automakers to Japan, and other industries have also been the focus of attention in trade negotiations. It is unusual for a president to represent one company’s interests, especially in a business that is so controversial in Japan.”

That is the real threat for the international gambling community. The Japanese people are famously against casino gambling. Polls show that 60% or more of Japanese residents are solidly against land-based casinos. That is why the Komeito Party was able to play hardball with Shinzo Abe’s allies, the Liberal Democratic Party, when crafting the IR Implementation Bill in May and June 2018. Casino licensing is a precious position for a Japanese politician — even a ruling one.

If the licensing of Las Vegas Sands becomes in the least bit unsavory or controversial, it could lead to the whole plan unraveling. If others follow Trump’s lead, that would create an atmosphere of scandal that could harm the entire plan. Donald Trump pressuring the Japanese prime minister to give Trump’s biggest political donor a multi-billion dollar license could have explosive consequences.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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