Sega Sammy Shows Interest in Joining Japan Casino License Race

The company is accumulating know-how to potentially build successful casino resort business in Japan

Japanese gaming machine manufacturer Sega Sammy Holdings is gearing up for participation in the bidding process for the development of three integrated resorts in Japan as a project of this kind will “open up a wide range of possibilities for the Group”, CEO Hajime Satomi said in the company’s recently released annual report.

Japan legalized casino gambling within integrated resorts in December 2016, thus starting what is expected to be a lengthy (and hoped to be not too lengthy) process of the formation of the nation’s casino industry. Earlier this year, the Japanese government passed a second piece of legislation that sets out the rules and principles under which casinos and the larger integrated resorts will be developed and regulated.

With the recent comments of its CEO, Sega Sammy is joining a number of major businesses vying for a share of what analysts estimate to be a gaming market with huge potential. While the bidding process for the three gaming licenses that will authorize companies to operate casinos within integrated resorts is yet to be launched, a number of major industry players, including Las Vegas giants Las Vegas Sands and MGM Resort International, and Hong Kong’s Melco Resorts & Entertainment, have already lodged their interest.

Sega Sammy’s primary business involves manufacturing and distribution of gaming machines, including the locally popular pachinko. However, the company has recently entered the integrated resort business by jointly developing and operating South Korea’s Paradise City in Incheon with local operator Paradise Co. The first phase of the property was launched last spring and additional amenities were opened last month.

Gaining Know-How

In the company’s latest report, Mr. Satomi said that they are “laying the foundations for participation” in Japan’s casino licensing process by “accumulating know-how” through their Paradise City property and other integrated resorts as well as by “establishing financial resources, and conducting multifaceted investigation and analysis.”

The executive believes that Japan will be ready to commence commercial integrated resort operations around 2024. That timeframe matches the expectations of other industry representatives. Following this summer’s passage of the Integrated Resorts Implementation Bill, Japan now has to establish a gambling regulator that will be tasked with conducting the licensing process and overseeing the country’s nascent casino industry.

It is believed that the licensing process will be completed by the end of 2019 and the winning bidders will be granted their authorization sometime in 2020. From that point onwards, it is anticipated that the first integrated resorts with gambling floors will be launched by 2024.

Mr. Satomi further pointed out that “the introduction of integrated resorts to Japan has the potential to become a powerful tool for activating Japan’s economy through the use of private-sector capital.”

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