Wakayama Prefecture, one of the candidates to host an integrated casino resort in Japan, announced Monday the selection process regarding its private sector partner to develop the project would be delayed. The two candidates that have been approved for the next round of the process would now have until October 19 to submit their request-for-proposal (RFP) materials, instead of August 31.
Business Restrictions and Travel Constraints
The push back of the initial schedule comes on the back of the country having just partially released its nationwide emergency, May 25, with constraints on domestic travel and certain business activities playing a significant role for the decision.
Last month, the prefecture announced its decision to continue the selection process with Suncity Group, residential and commercial development company traded on the Hong Kong stock exchange, and Clairvest Group, a Canadian-based private equity management firm, giving them initially until the end of August to submit their detailed design projects for evaluation.
Respectively, Wakayama Prefecture officials will now have until January 2021 to evaluate both candidates’ proposals and to announce its preferred private sector business partner. The prefectural IR Promotion Office also pointed out that further amendments to the schedule are still possible, dependent on national trends.
Officials from Wakayama outline, though, they do not intend to ask the national government to extend the period for application for the prefectures, which is due to be within the first seven months of 2021. As per the Japan IR Law, the first phase would allow for up to three integrated casino resorts to be built in the country, and by the end of 2021 Wakayama would know whether it will be granted one of the available slots.
The IR Promotion Office is expecting the prefecture to be able to open the casino-type resort for visitors in spring time 2025, or at least this is the estimated date indicated on its website.
Major IR Setback
The Japan IR project took a significant hit in May, when the world’s largest casino company, Sheldon Adelson’s Las Vegas Sands (LVS) dropped out of the race to pursue license, formally citing the conditions regarding the 10-year lease. LVS’s integrated resorts in Macau and Singapore have leases for 20 and 30 years, respectively.
Whether the lease duration was the main driver behind the decision to remove itself out of the Japan IR picture, or there were other factors is a matter of speculation. It is no secret that gaming properties in both of LVS’s Asian jurisdictions, Macau and Singapore, have been severely impacted by closures, with Macau gambling industry revenues falling more than 90%, serving as a wake-up call for the entire industry.
Questioning the company’s financial strength may be foolish as Las Vegas Sands was also one of the few that pledged to continue paying its staff throughout the whole two months period of casino closures in the US. There were even rumours suggesting the casino giant was dropping the Japan IR race to prepare an acquisition bid for its rival, Wynn Resorts.