Japan studying S'pore IR model

Las Vegas Sands (LVS) will consider investing at least US$6 billion (S$7.4 billion) in integrated resort development in Japan, and may consider porting elements of the Singapore IR model including social gambling protections - if it gets approval to expand in the country, according to a top company executive.

LVS chairman and chief executive Sheldon Adelson told analysts during a third-quarter earnings call on Friday that Japan was studying the IR model out of Singapore, its MICE (meetings, incentives, conventions and exhibitions) business, and social gambling protections, such as the $100 daily entry levy.

"They are looking at creating tourism," he said. "Our IR in the first 24 months increased tourism in Singapore by 41 per cent. We have changed Las Vegas with our convention business model. We've changed Macau and we've changed Singapore, and we can easily change any city in which we have a MICE-based business model."

Michael Leven, LVS's president and chief operating officer, told a gaming investment conference last month: "We think the Singapore model protects the community in the best possible way. We think the regulations, though, are very difficult but they are very manageable. We think the Japanese will be very careful and will probably go with that model."

International casino operators, including Wynn Resorts and MGM Resorts International, have begun studying expansion opportunities in Japan as Tokyo's selection to host the 2020 summer Olympics boosts confidence that a law legalising gambling resorts in the country will be passed.

Mr Leven said LVS was "very well positioned" and "very optimistic" that it will be one of two firms selected for one of the two major cities in Japan.

He reckons that Japan would be the most expensive investment LVS has ever made from a single property standpoint.

"The estimates range from US$6 billion in Tokyo and up. There is talk that construction costs could go up further because of the Olympics. In Korea, we won't expect to spend that kind of money at all. It will probably be less than the Singapore property. In Vietnam, construction costs will likely be lower because labour and construction is cheaper.

"We don't know what the (gaming) tax rates will be in Japan, or in any of the other countries, so we can't estimate the bottom line. But we can estimate construction costs and costs of operation."

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