Las Vegas Sands (LVS) Chairman and CEO Sheldon Adelson says his previous experience aiding Japan’s MICE industry gives the company a huge advantage in the race to win one of the three coveted Japanese integrated resort licenses on offer following passage of the IR Implementation Bill last Friday.
Addressing the long-awaited green light for Japan’s IR industry during his firm’s second quarter earnings call on Thursday, Adelson described LVS as being in “pole position” to win an IR license on the back of past success working on various Japanese MICE-related projects.
“What I’d like to point out is that we have … everybody says we have the leading position in Japan because of my background,” Adelson said.
“I used to produce COMDEX (computer expo) in Japan and I also helped them redesign the biggest exhibition center they have in Japan called Makuhari Messe. When they went to build that in the 1980s, the Governor of Chiba, in which Makuhari is located, came to my office in Boston and I helped them redesign the exhibition center.
“So I’ve got a good background and reputation in Japan for being the leading MICE integrated resort developer and operator and I think that the estimates by people who know … they say we’re in the number one pole position.”
Despite his confidence, Adelson said that the size and investment level of any IR that LVS builds in Japan will be dependent on government rules and regulations – most notably the specific guidelines relating to permissible casino space.
“We don’t intend to do anything that will bring returns down below 20% cash-on-cash,” he said.
“And we just don’t know the details. The law was just passed last week, there are about 250 different items in the bill and I think it’s going to go down to the various prefectures before we know what can be done and when.
“We also need further clarification on several of the important things like the percentage of overall build space. They’re saying 3% but there are a lot of variables that might be able to get us.
“I mean, we normally count front of the house and back of the house in our casino allocation or space, but over there we will count only the front of the house. And, as we understand it, we won’t have to count the aisles and the food and beverage space as part of the 3%.
“So it’s a matter of how many gaming positions we put in and I think it’s too early now. This implementation bill will take at least a year for any city that wants to be involved to come up with their requirements and their criteria.”
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