Years of dedicated efforts, extensive spending, and the reallocation of resources in Wakayama, Japan, were all for nothing. The prefecture has rejected a proposal for an integrated resort there, leaving only Nagasaki and Osaka in the running.
Wakayama’s plans for a “huge financial windfall” from the operation of an integrated resort (IR) in the prefecture just fell off a cliff into the abyss below. In a surprise twist in the race to introduce casinos to Japan’s landscape, the prefectural government just rejected an IR proposal the city of Wakayama presented, as reported by GGRAsia.
The prefecture held a vote on the proposal today. The city was in the final stretch of its project, with its plan due to the national government by April 28. The last hurdle was the prefectural government, which pulled the rug out from under it.
IR Plan Light on Details
When the IR project arrived in front of Wakayama prefectural legislators, 22 of them rejected it. 18 tried to see it survive. The outcome may have started to become apparent yesterday, when a prefectural assembly committee rejected it as well.
One of the biggest issues that prevented the plan from moving forward was the lack of information. The IR was going to be an expensive undertaking. However, questions over financing the $3.8-billion project were left unanswered. Notably, the project’s primary casino operator, Clairvest Neem Ventures, had yet to thoroughly detail how it would cover its financial obligations.
There were also questions about how the prefecture would cover its end. This is in spite of the fact that a number of backers, including Credit Suisse Group, Cantor Fitzgerald, and others signed in.
It seems odd that the IR project would fail only at the very last minute. While the prefectural vote was close, there was enough separation that Wakayama city leaders had to have known for a while what might occur at the prefectural level.
And Then There Two
Wakayama may be out of the race, but Nagasaki and Osaka are still in. Nagasaki’s prefectural government approved the prefecture’s proposal today. It will now go before Japan’s national IR team for review, and then, backers hope, approval.
As a result, Nagasaki is still on track to bring a $3.5-billion IR to the city of Sasebo. It will be located near the Huis Ten Bosch theme park in the city, provided it receives the green light from Japan.
Although Wakayama’s plan failed because of a lack of financial details, this didn’t stop Nagasaki’s proposal. There are still questions about financing for the project. However, the prefecture obviously knows enough to be optimistic about its future.
Osaka already greenlit an IR proposal in the prefecture. It was the first to cross the finish line when lawmakers there approved the project at the end of March. That’s good news for MGM Resorts International, which could become the first US-based casino operator to launch in Japan.
There was another contender, but its arrival was ill-timed. Because Japan may initially approve up to three IRs, Tokyo may regret not entering the race sooner now that Wakayama is out.
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