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HomeNewsJapanChanging political winds pose risks for Clairvest’s Wakayama bid

Changing political winds pose risks for Clairvest’s Wakayama bid

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Caesars Entertainment has reemerged as a contender for an IR license in Japan, although it may face headwinds due to the shifting sands of Japanese politics.

Wakayama, japan, IR license, caesars entertainment
Wakayama Marina

The U.S. operator pulled out of the IR race in 2019 after a merger with Eldorado Resorts to focus on its U.S. operations. However in late September, it announced it was back, joining the Clairvest consortium for the proposed development of the Marina City integrated resort in Wakayama.

It was no secret that Clairvest had long been seeking a casino operator partner, but had found few takers. All the major brands had fully invested their energies in metropolitan locations and Wakayama was only enough to whet the appetite of French casino outfit, Groupe Partouche, to join the Clairvest consortium.

The favorite had been Suncity Holdings, which ran a well-tuned PR ground campaign, which eventually saw it outscoring Clairvest in the formal evaluation process. Clairvest had looked to be heading out the door until Suncity’s unexplained abrupt withdrawal in May, leaving the Clairvest camp buoyant as it meant they were now the sole bidder.

The revelation of Caesars’ entry creates confusion over Partouche’s future role in the consortium. Landing a catch like Caesars is no mean feat, plus the carefully curated timing of the announcement bore the fingerprints of Bill Weidner and Brad Stone, the two being the principals of consortium partner, AMSE Resorts Japan.

I first encountered Stone almost twenty years ago in the cramped offices of Sands China overlooking the Sands Macao construction site. He was lying on a sofa in the executive office foyer with his hands behind his head and his feet propped on the sofa’s arm at the other end. Dressed in denim jeans and a polo shirt, his casual and almost languid demeanor belied the man who is one half of the dynamic duo who conquered Asia for Las Vegas Sands.

A year later, as a member of the official Singapore government IR study delegation visiting Macau, I would witness a whirlwind Weidner literally hijacking our Minister from under the nose of Lawrence Ho in front of the Lisboa Hotel. While Jeff Parr of Clairvest is certainly no pushover, it’ll probably need the extra nudge in the heavyweight names of Weidner and Stone to reel Caesars’ Tom Reeg into the frame.

The consortium now had the backing of a major casino operator and politics were expected to play in its favour, but the surprise victory of Fumio Kishida in the Liberal Democratic Party election may have upset the apple cart.

For weeks, Taro Kono was widely touted as the firm favorite to become the next Prime Minister. However, with the largest Hosoda faction endorsing Sanae Takaichi and Fumio Kishida, and his own Aso faction refusing to unite behind him, it became an open fact that Kono would need a leg-up from ‘Kingmaker’ Toshihiro Nikai, if he was to claim the prize.

Nikai, of course, hails from Wakayama. Had it all gone to script, Nikai would have retained his powerful LDP Secretary General position and be owed a debt of gratitude from Kono, an obvious quid pro quo being to bequeath an IR license to Wakayama. Kono’s ascension and Caesar’s inception would have converged brilliantly to elevate Wakayama’s IR prospects.

Japan, wakayama, ir, bid, license

Instead, Kishida in the top seat is the worst possible outcome for Wakayama. A key election promise by Kishida was to dismantle the stranglehold of the old guard within the LDP and impose term limits to the top four party posts below the president, a reform aimed squarely at Nikai.

Kishida lost no time a day after his victory to replace Nikai as Secretary General and filled the other key posts from Shinzo Abe’s Hosoda faction and the Aso faction, leaving Nikai’s faction empty handed. The aftermath may be ominous for Wakayama’s IR ambitions and rendered the Caesars announcement a bit flat.

As it is, with Osaka considered a safe IR bet, a scenario of the Kansai region bagging two of the three licenses nationwide is problematic. And then there’s the matter of an offspring of Stanley Ho as a primary investor in the consortium which poses probity challenges down the road. Unfortunately for Mario Ho, the highly-regulated gaming industry penalizes actors for the sins of their fathers.

With expectations for the Japan regulatory framework to be more stringent than that of Nevada, Singapore and Australia combined, it’s another tripwire facing the Clairvest consortium down the road.


Kishida election positive for Japan’s IR ambitions

Fumio Kishida
Fumio Kishida

Former Foreign Minister Fumio Kishida has won the leadership contest for Japan’s ruling Liberal Democratic Party, ensuring no political upsets for the country’s nascent IR industry at least at this stage. Kishida beat out favourite, Taro Kono, to take over from Yoshihide Suga who stepped down as prime minister in September.

Kishida will now take his place to lead the country into general elections in early November. Kishida had visited Singapore in his capacity as Foreign Minister and toured the city’s two integrated resorts. Thanks to behind the scenes political maneuverings in Japan, Kishida is likely to be most beholden to the Seiwa Seisaku Kenkyūkai, the largest faction in the LDP.

The faction’s official leader, Hiroyuki Hosoda, is widely acknowledged as the main advocate and conservator for the Japan IR initiative and he will expect Kishida to make integrated resorts a priority agenda in return for his bloc’s support.


Nagasaki IR to generate $2.9b for economy, Casinos Austria says

Japan, huis ten bosch
Huis Ten Bosch

Casinos Austria International Japan said its Nagasaki Integrated Resort, to be developed alongside the Dutch-themed Huis Ten Bosch park, will attract up to 8.4 million visitors a year and will generate $2.9 billion for the economy.

The $3.2 billion project will also create 30,000 jobs, it said. The proposal will be put forward to the central government that will choose the three locations for the IR licenses. There are currently three cities in the bidding, with Osaka and Wakayama, joining Nagasaki. “We will construct an IR appealing to all with CAI’s full support and safety and security as the top priorities.

We will come together with Nagasaki prefecture and Kyushu’s corporations to create an area development plan in order to gain approval for Kyushu/Nagasaki as an IR area.” “In cooperation with Kyushu/Nagasaki companies, we aim to build a world-class IR with a traditional sense of luxury that will lead to a wave of economic effects throughout all of Kyushu.”

ABOUT THE AUTHOR

Daniel Cheng
Daniel Cheng
Daniel Cheng is an industry veteran and the author of “The Rainbow Upopo” and “Japan Casino Uprising.”

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