Yokohama opts to enter the IR race

Yamashita
Yamashita

The municipal government told reporters on Monday that Yokohama’s long period of indecision had ended and that Mayor Fumiko Hayashi would announce later in the week that her city would seek to host a major urban IR at the 47-hectare Yamashita Pier location.

Since January 2017, Mayor Hayashi had professed to be a “blank slate” on the issue, and only last month she said that any decision would have to wait until the national government had issued the more detailed regulations guiding the new industry, expected by the end of year.

The city is expected to seek a JPY260 million (about $2.5 million) supplementary budget in September for IR-related expenses, including the establishment of an expanded team of city officials to manage the policy.

Following an RFI process carried out last summer, eight IR firms told the Yokohama municipal government that they anticipated annual revenues of between JPY350 billion (about $3.2 billion) and JPY880 billion (about $8 billion) and EBITDA in the JPY80 billion (about $730 million) to JPY210 billion (about $1.9 billion) range.

Yokohama’s entry to the race shakes up the field and will come as very bad news for candidate locations such as Tomakomai, Wakayama, and Sasebo, which presumably will be fighting amongst each other for only a single IR license to be given to a local municipality.

On the other hand, Mayor Hayashi’s open campaign for an IR license is nearly certain to bring a ferocious response from anti-casino forces in Kanagawa Prefecture, and it is not clear how the opposition of Yokohama Harbor Transport Association Chairman Yukio Fujiki will be overcome.

At least six IR major operators are expected to bid to partner with Yokohama: Caesars, Galaxy, Genting, Melco, Sega Sammy, and Wynn Resorts. It is also feasible that Las Vegas Sands will backtrack from its recent commitments to focus only on Osaka. It seems highly unlikely that MGM will do the same in light of the deeper roots of its “Osaka First” policy.