With the race for Yokohama’s IR project reaching its final stages, only Genting Singapore and Melco Resorts remain as contenders for the Japanese city’s planned development. [Image: Shutterstock.com]
Two operators make the cut
The city of Yokohama first announced plans for an integrated resort (IR) bidding process in 2019. Since then, seven companies have expressed interest in building and running a casino in the Japanese city. Now, just two gambling operators remain in the race.
In a statement on the Yokohama website on Monday, officials confirmed that only two operators have qualified for the city’s Request for Proposal (RFP). The statement did not name those companies specifically, but only Melco Resorts and a consortium led by Genting Singapore remain as candidates.
Often shortened to IR, the term ‘integrated resort’ refers to a development which usually comprises a hotel, retail, dining venues, entertainment facilities, and a casino. Yokohama put itself forward for one of Japan’s three IR licenses in August 2019, joined also by Nagasaki, Osaka, and Wakayama.
Yokohama will now accept proposals until June 11, after which the city will select its succesful operator. After a series of delays to the process, officials expect the chosen candidate to open its IR in 2026 at the earliest.
From seven down to just two
A number of operators had already dropped out of the race for Yokohama’s IR before the city started accepting applications in February, with reasons varying from pandemic concerns to delays and development costs.
Along with Las Vegas Sands, Wynn Resorts withdrew its bid last year, deciding instead to focus on other markets. Galaxy Entertainment Group left the race two weeks ago meanwhile, citing an evolving “world and business climate.” Most recently, Shotoku, another smaller Yokohama-based company, failed to meet bidding requirements.
a consortium with Sega Sammy Holdings and Kajima Corporation
Hoping to increase its chances of securing the project meanwhile, Genting Singapore has partnered with two other companies. The operator formed a consortium with Sega Sammy Holdings and Kajima Corporation. Sega Sammy initially entered the process independently, but later announced its intention to become a minority shareholder in the IR.
Similarly, Melco has formed a partnership of its own to assist with the development. The Asian casino operator has teamed up with local construction and civil engineering firm Taisei Corporation.
Report backs Genting Singapore
A report from Maybank Research published in May this year singled out Genting Singapore as well positioned to secure Yokohama’s IR project. Analyst Samuel Yin Shao Yang described the casino operator as “better positioned than its competitors by miles,” noting its promotion of tourism, management, and financial ability.
The report went on to estimate that the Yokohama IR would generate around $2.7bn in net profit in its first full year of operations. For the three Japanese IR’s, Maybank Research predicted total gross gaming revenue of $11.7bn per year, with Yokohama ultimately contributing 60% of this total. In contrast, Osaka or Wakayama would generate 27%, and Nagasaki 13%.
Although the race for Yokohama’s IR is well underway, the process could face some friction due to upcoming mayoral elections scheduled for August 2022. The local government remains divided over the issue, with some in staunch opposition to the idea of a casino resort.