Wakayama Welcomes Executives from Four Global Casino Groups
The impending implementation of a Japanese integrated resort bill has led to increasing activity among planners and potential license holders in Japan’s outlying prefectures. In February, officials from the Wakayama Prefecture hosted an IR forum for over 300 people associated with casino resorts.
Osaka-based marketing company, Hogo, organized the event in unison with the Wakayama Prefecture Government, the Wakayama Chamber of Commerce, and Asia Gaming Brief. Four Japanese casino license applicants attended the event: Connecticut tribal authority Mohegan Gaming & Entertainment, Macau’s Galaxy Entertainment Group (GEG), Manila’s Solaire, and France’s Groupe Barriere.
Given their attendance, it was a preview of the international gaming groups who might be interested in a Wayakama casino license. Government officials in Wakayama return the interest.
Chris Wieners, a managing partner at Hogo, said of the half-day event, “Wakayama continues to be aggressive in letting everyone know that they desire to host one of Japan’s three potential IRs.”
It is a growing trend. In January, Hokkaido, which has not applied to be a casino region, hosted an integrated resort (IR) showcase for seven casino operators.
Wakayama Prefecture a Safe Choice
Of the three regions in contention for a casino license — the Osaka, Wakayama, and Nagasaki preferectures — Wakayama is the one with the least amount of risk. Last month, Wakayama voters re-elected Governor Yoshinobu Nisaka to a fourth term by a 4-to-1 measure. Nisaka’s opponent had called for a referendum on the casino license, so the nearly 80% to 20% vote shows widespread support for a local casino.
Gov. Nisaka noted that his prefecture, like Osaka, already has a casino site chosen. The integrated resort will occupy 121 acres of land overlooking Marina City, which opens into Osaka Bay. Nisaka told officials from the four attendees, “You can start construction right away.”
The Marina City casino-resort will be located on an island in the bay. Wakayama is close enough to the Osaka-Kobe metropolitan area that it has many of the advantages of an Osaka license, while offering a slightly more remote and less populous holiday spot. It is a short ferry ride to the airport and cruise ship facilities, so cruise lines might make Marina City a regular stop.
Marina City Integrated Resort
Marina City is a tourist area known for its seafood and fruit vendors; Wakayama is known for its plums and oranges. The area draws 33 millions tourists a year already. It is known for its UNESCO-recognized historical Buddhist Shrines, as well as popular beaches like Shirarahama.
The area also has a yacht harbor, fishing pier, picturesque seaside views, and onsen (hot spring). An amusement park, Adventure Land, currently sits on the island, but will be demolished to make way for the integrated resort.
All in all, Wakayama is part of the Great Osaka Metropolitan Area, which (along with Kobe and Kyoto) contains over 22 million residents. It is Japan’s second-largest metropolitan area behind only Tokyo. Wakayama itself sits 40 minutes drive from Kansai International Airport, one of the largest airports in the world.
Wakayama IR Complements Osaka IR
Early in the process, it was expected that Osaka would win the only casino license in the region. With its huge population, the 2025 World Expo on the way, and its reputation for leisure and tourism, Osaka is a natural spot for a casino.
Then a smaller-than-expected number of prefectures welcomed a casino license operator. That put Wakayama squarely in the sights of potential casino operators — though they claim the city always was seen as a good location.
Jonathan Strock, Barriere Japan’s president, said of the area, “One IR won’t [be] enough for Kansai. Osaka and Wakayama IRs are not competitors, they’re complementary.”
Osaka License Costs 4x More
One advantage the Wakayama Prefecture has for license applicants is price. The Osaka license will cost four times as much as the Wakayama. Developing a casino might cost four times as much for Osaka as Marina City, too.
Operators like Las Vegas Sands, Melco, and MGM Resorts are expected to compete to build an $8 billion integrated resort in Osaka. Wayayama might cost a “mere” $2 billion to build. The Japanese government looks as if it will take another year to collect license applications, vet the applicants, and make decisions on the best developers for their gaming sector.
Vector Risk Management on Japanese Casinos
Those with knowledge of the process say Japanese officials want to shift wealth from the biggest cities to more outlying areas in need of jobs and tax revenues. Wakayama therefore is a perfect choice for a variety of reasons.
Kenji Okamoto of Vector Risk Management said, “The national government appears to be heading in the general direction to re-balance the focus and concentration of wealth, talent and population from Tokyo and other major prefectures, to these regional areas, lest the imbalance widen.”
“Providing a regional license may also help garner support and interest for IRs, both of which are still lacking among the general populace.”