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Japan & Integrated Resorts: Nagasaki’s RFP Ends with 5 Proposals; Yokohama Adds ¥360 Million to IR Promotion Budget

Article by : Helen Feb 11, 2021

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Nagasaki prefecture’s request-for-proposals ended as planned, on January 28. However, we are still left in the dark regarding which companies (or joint ventures) decided to throw their hat in the ring by the prefectural authorities. All we know is that they received 5 applications – and that now the participants should strap in for the first examination documents submission due March 1.

We also know that Mohegan Gaming officially partnered up with a Japanese development company, Oshidori International Development, for the Nagasaki bid. Other companies that announced their participation in the race are Casinos Austria, Pixel Companyz with Groupe Partouche, and Get Nice Holdings with Current Corp.

Should it win the nationwide concession race, the Nagasaki prefecture is set to build an integrated resort in Sasebo City.

Nagasaki’s governor, Hodo Nakamura, commented on the request-for-proposals’ progress, explaining that “due to the impact of the global expansion of the new coronavirus infection, overseas IR operators were forced to suspend the operation of their facilities, which had a great impact.” He added, “There is still time left before the latter half of the 2020s for us to create an environment where you can enjoy [going to an integrated resort] in a safe and secure way.”

Yokohama city is preparing for its own RFP, too. The city council passed its 2021 budget on January 29, and it allocated 360 million yen (roughly $3.43 million) to promote the IR project to potential bidders and go through with the request-for-proposals. This is 40 million yen ($381 thousand) less than 2020’s IR promotion budget.

This money will be used for “selecting businesses, formulating area development plans, holding business briefings and public hearings to build consensus in the prefecture, and publishing promotional materials in magazines.” The first phase of Yokohama’s request-for-proposals is set to start on February 5 and last until May 17.

The decision means that the city is still keen on getting the integrated resort race up-and-running despite considerable opposition to the idea among locals. The citizens’ groups were urging the Yokohama mayor to hold a referendum on the matter, but she shot down the idea (even though she previously voiced her support for holding it to “respect the opinions of the people”).

Japan’s whole integrated resort endeavor has seen a few major setbacks over the past year. Apart from a bribery scandal that came to light at the beginning of 2020, potential casino operators don’t rush to line up for submitting a proposal. Las Vegas Sands, Caesars Entertainment, Genting Singapore, and Wynn Resorts have all dropped out of the race for a concession in Japan last year.

The industry leaders’ hesitation to throw themselves in the race is no surprise amidst the pandemic that thinned out the companies’ resources and made Japan’s touristic potential bleak. When the integrated resort project was in its development, analysts estimated it to be worth $40 billion. Now, that estimate shrank fivefold to $8 billion. Wynn Resorts is the latest one to back out. For more than a year, the casino operator was determined to get its piece of the pie in the Yokohama prefecture – Wynn even opened an office in the prefecture, but it operated for just eight months.

MGM Resorts International is still in the game: it partnered up with ORIX Corporation for the joint Osaka city and prefecture bid. According to the prefecture, the consortium was the only participant in the request-for-proposals, held at the beginning of 2020. Now, the prefecture has to get approval for the area development plan from the assembly and the city council.

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