Las Vegas Sands Abandons Japan Casino Resort Plan

Casino powerhouse Las Vegas Sands is no longer pursuing development opportunities in Japan, the company said in a statement on Tuesday.

The company’s decision to shelve plans to build a $10 billion integrated resort in the country puts an end to a more than a decade-long effort to expand in Japan.

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Las Vegas Sands CEO and Chairman Sheldon Adelson said in a statement that “the framework around the development of an IR has made our goals there unreachable.”

According to sources familiar with the matter, the company’s management was not particularly happy with some of the terms of Japan’s casino legislation.

Sources said that the fact that approved integrated resort developers would be granted only 10-year licenses was one of the main reasons why Las Vegas Sands has decided to drop its Japanese plans. In Macau and Singapore, the other Asian markets where Las Vegas Sands operates integrated resorts, the operator has received 20- and 30-year licenses, respectively.

If Las Vegas Sands needs five years to build an integrated resort in Japan, a 10-year concession would not be enough for the company to earn a good return on its planned $10-plus-billion investment.

In addition, the Japanese government has made it clear that it could change the terms of the licenses, and such changes could cripple holders’ profits.

Las Vegas Sands Dropping from Race Another Big Blow to Prime Minister’s Casino Effort

Japan has authorized the development of up to three integrated resorts with casinos. The country’s central government is expected to launch an application process for cities interested to host one of the three mega-complexes and their private-sector developer partners early next year.

Japan’s effort to bring casino gambling within integrated resorts has spanned more than a decade and has attracted some of the world’s largest gaming and hospitality companies.

Las Vegas Sands itself had originally been interested in building an integrated resort in Osaka. However, the company focused its attention on Yokohama last summer after the city said that it was willing to host one of Japan’s first resorts.

Las Vegas Sands has now become the second big company to announce that it has decided to no longer pursue development opportunities in the nascent Japanese market. Caesars Entertainment Corp., another Las Vegas giant, dropped from the race last year, saying that it would instead focus on its US properties and its merger with Eldorado Resorts.

Las Vegas Sands’ decision comes as another big blow to Prime Minister Shinzo Abe-backed casino resort effort. Late last year, a Japanese lawmaker was arrested for allegedly taking bribes to spearhead a Chinese sports lottery’s bid to win one of the three licenses. The politician maintained his innocence, but the scandal that his arrest caused resulted in diminished public support for the introduction of casinos in the country.

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