Genting Singapore Shows Sharpened Appetite for Japan Casino Expansion with New Local Subsidiaries
Integrated resort developer and operator Genting Singapore announced Tuesday that it has established five new indirect wholly-owned subsidiaries in Japan just days after the country’s government passed a bill that authorizes the construction of up to three integrated resorts with gaming floors.
The company said in a statement from yesterday that it has incorporated the Genting Japan Co., Ltd., Genting Tokyo Co., Ltd., Genting Osaka Co., Ltd., Genting Yokohama Co., Ltd., and Resorts World Yokohama Co., Ltd. companies as part of its pursuit of a license for the development of an integrated resort in Japan. The names of some of its new subsidiaries suggest the locations the company might be interested in developing its property in case it wins one of the limited number of licenses to be issued by the Japanese government.
Genting Singapore is a subsidiary of Malaysian gaming and hospitality giant Genting Group. The company operates Resorts World Sentosa, one of the two integrated resorts with gaming floors currently operating in Singapore, following the city-state’s legalization of casino-style gambling within larger properties in the mid-2000s.
The government of Japan has been toying with the idea of legalizing casino gambling for over a decade, but constant changes in the country’s political landscape in previous years have slowed the process. In addition, other legislative priorities have further pushed the passage of a gambling-focused legislation in the background.
Lawmakers eventually decided that the legalization of casinos as part of larger resorts would be a two-phase process and would include the legalization of casino gambling in the country and setting out the principles and rules under which integrated resorts with gaming floors would be developed and operated.
The Japanese Diet passed the Integrated Resorts Promotional Bill in December 2016, thus legalizing casino gambling in the country. A second piece, the Integrated Resorts Implementation Bill, was voted through the Upper House of the country’s legislature last Friday. The bill gained the necessary approval in the Lower House last month.
Genting Singapore’s Pursuit of a Japan Casino License
Genting Singapore first revealed that it was examining opportunities to set foot in Japan back in 2012. The company was facing regulatory headwinds in its domestic market at the time and was looking to expand overseas in a bid to offset losses it expected to suffer from the challenging operational environment in Singapore.
Genting Singapore has been preparing diligently for its coveted entry into Japan’s future casino market. The company opened an office in Tokyo last September to follow the developments in the country’s casino legalization process, offer “administration and resource support”, including funding market studies and related research, and promote the economic benefits of integrated resorts.
Japanese Prime Minister Shinzo Abe, who has been one of the biggest and most consistent supporters of the development of casino resorts in the country, has repeatedly pointed out that properties of this kind would boost Japan’s tourism industry immensely. That said, the nation is seeking to build large-scale integrated resorts and Genting Singapore has previously said that it was prepared to invest up to $12 billion in building a property of this kind.
According to a recent report by research firm Maybank Kim Eng, Genting Singapore could actually be among the operators with the largest chance to win a casino license in Japan, given the fact that it is sitting on a cash pile of S$3 billion (according to the company’s Q1 report), unlike many of its “debt-laden” counterparts from the United States.
To better focus on its Japan expansion plan and save capital for a massive integrated resort, Genting Singapore sold in late 2016 its 50% stake in a $1.8-billion scheme for the development of an integrated resort on South Korea’s Jeju Island. Genting’s partner in the endeavor, Chinese real estate developer Landing International, bought its stake for $420 million.
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