The main stumbling block is believed to be the ten year length of the licence with Sands needing a longer guarantee for the planned US$10bn investment needed.
“We are grateful for all of the friendships we have formed and the strong relationships we have in Japan, but it is time for our company to focus our energy on other opportunities,” Adelson also commented.
Analysts gave mixed views on the news. Sands had focused its attention on Tokyo and Yokohama.
Mio Kato, Head of LightStream, said: “I think that is probably more Sands than Japan. They and most casino operators have been cutting their dividends and since most operators were already levered, the COVID crisis has made a complete mess of their balance sheets.”
Brendan Bussmann, a partner at Global Market Advisors, commented: “Operators want to know the environment they’re going to potentially operate in. The longer this gets delayed, the more people you may see bail in what I know is a strong market. Japan is still a really strong market and can be a great gaming market. It’s just a matter of getting through some of these hurdles.”
Speaking during the company’s quarterly financial earnings call, Adelson hinted said there would be further developments in Asia through merger and acquisitions, prompting Union Gaming to highlight Philippines casino Okada Manila, Australia’s Crown Resorts and Wynn Resorts as being the most likely targets.
“We are looking to see high quality assets where they are in key markets where it may be cheaper to buy them to build, and you may find something that is attractive and fits into our overall strategy in the long run, and I think we’re going to be very returns focused. We are interested in M&A,” Adelson added.
The Japanese government has given the country’s local authorities until July to submit applications to host one of three IR sites, and maintains this timetable will not be changed despite the disruption caused by the novel coronavirus (Covid-19) pandemic.
Sands had been expected to compete for a licence to build a facility in Yokohama, with Okinawa, Osaka, Wakayama, Sasebo and the capital Tokyo understood to be in contention. Hokkaido, however, pulled out of the process, citing environmental concerns, in November 2019.
Source: GMB
