Las Vegas Sands Pulls The Plug On Japan IR
Not only has Japan; albeit by no fault of its own; lost out on hosting the 2020 Olympic and Paralympic Games, but according to several market commentators, may lose out on the business of numerous potential gambling industry investors too – this as a direct result of its excessive and in some cases brutally draconic Integrated Resorts rules and regulations.
In fact, Japan has just forfeited a $10 billion investment previously planned for by the Las Vegas Sands Corporation. The casino and entertainment giant have however announced that it will no longer be pursuing its plans to open a casino resort in the country and will pursue alternative Asian opportunities instead. Las Vegas Sands isn’t the first industry giant to have pulled its plans regarding Japan – Caesars Entertainment and Wynn Resorts have both announced similar changes of direction.
What Exactly Changed?
The cancellation was announced via a Wednesday press release by Las Vegas Sands founder and chairman, Sheldon Adelson. According to Adelson, Japan’s regulatory framework has been the main fly in the ointment and that the country’s overkill approach has made the casino group’s Japan-focused goals largely unreachable.
A major shift must have taken place between January and the present-day, as the group appeared fully committed to its goal of securing a Yokohama licence as recently as the beginning of the year. Most major casino groups had in fact been eager to secure any one of Japan’s 3 earmarked IR Resorts, with major financial analysts like Sanford Bernstein having previously pegged projected annual wort at least $8 billion a year. Japan’s excessive regulatory approach has however proved more than just a slight damper, with many financial analysts having indicated that the prospect of a Japan licence is bound to become even less attractive as time wears on.
No Japan Means Money In The Bank
Companies like Adelson’s Las Vegas Sands will want to rest assured in the guarantee of a proper return on investment. The situation as it stands at present does not appear to inspire any sort of confidence of this nature. And of course, as pointed out by Mio Kato of Lightstream Research, the current global health crisis hasn’t paid casino companies’ balance sheets any favours either, turning an already precarious situation into a full-on financial mess.
Las Vegas Sands at one stage indicated that its estimates indicated that successfully setting up a casino resort in Japan could set the company back by as much as $10 billion. This means that pulling the plug on Japan necessarily implies quite a bit of money saved.