Caesars Entertainment Corp. said it was dropping its nearly decade-long effort to win a Japanese integrated resort opportunity, announcing that the casino giant would instead focus its efforts toward completing a $17.3 billion merger with Eldorado Resorts.
In a statement issued in Tokyo early Thursday morning, company CEO Tony Rodio said the timing of the decision was “driven by sensitivity to the significant decisions Japan’s government and business partners will likely be making later this year to advance the process.”
A Caesars spokeswoman said the company did not plan to issue the release in the U.S.
Japan has long been viewed as a potentially lucrative country for casino gaming, with predictions of up to $20 billion to $25 billion in annual gaming revenue, second only to Macau. Caesars, MGM Resorts International, Las Vegas Sands Corp., and Wynn Resorts have all been active in pursuing an opportunity in the market.
In 2017, Japan lawmakers approved legislation for three integrated resort complexes, which would include casinos, hotels, restaurants and non-gaming attractions, such as retail, conference facilities and entertainment. Japanese leadership has still not formulated the request for proposal process nor officially settled on locations.
In June, Eldorado CEO Thomas Reeg hinted the merged company might not be interested in Japan, while also saying Eldorado is primarily a domestic-based company.
“We have not made firm decisions on international (operations) yet,” said Reeg, who will become CEO of the merged operation when the transaction is completed next year. “The opportunity internationally will have to be stupendous for us to run in that direction.”
On background, gaming analysts said Eldorado’s leadership has been open about not pursuing international development.
The Caesars news comes a week after Las Vegas Sands Corp. said it would not pursue building an integrated resort in Osaka, Japan and would instead turn its attention toward Tokyo and Yokohama.
Rodio said Caesars applauded Japan’s “thoughtful, inclusive approach to creating an integrated resort business model that supports Japan’s social, as well as economic, aspirations.”
Caesars had shown interest in the Japanese cities Osaka, Yokohama and Hokkaido.
Caesars Chairman Jim Hunt added, “As Caesars has pursued a license to operate in Japan over many years, we have been treated with respect and goodwill by the Japanese government, business and community leaders, and with kindness by all the Japanese people we have encountered during this journey. We are grateful for the country’s receptivity to Caesars.”
Caesars missed out on a gaming opportunity in Macau in the early 2000s, and had long sought an Asian gaming destination. The company still has plans to develop a $700 million integrated resort in Incheon, South Korea.
Las Vegas Sands had focused on Osaka for several years, seemingly competing for a single license with MGM Resorts and several Asia-based gaming operators. Government leaders in Osaka have wanted to see an integrated resort built in time for an international Expo in 2025.
The move by Las Vegas Sands seemingly put MGM Resorts in the lead to develop an integrated resort in Osaka.
When the Eldorado-Caesars combination was announced in June, Reeg said the companies would sell a few of the nine Las Vegas Strip casinos involved in the merger, all currently owned by Caesars. Also, casinos in some of the 16 states where the combined the company will operate will also be on the move to avoid federal anti-trust issues.
News of Caesars departure from the Japan process came after the U.S. markets closed Wednesday. Shares of Caesars closed at $11.43 on the Nasdaq, up 9 cents or 0.79%. Eldorado closed at $38.10, up 79 cents or 2.12% on the Nasdaq. The company’s shares were down less than 1 percent in after-hours trading.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
