Scientific Game

Disposal Option

Is Aruze cooler on its alliance with Wynn Resorts?

Friday, 07 January 2011 16:31
Share
Visit us

Does Kazuo Okada know something the rest of the market doesn’t?

The announcement on 15th December tucked away in a Wynn Resorts filing to the US Securities & Exchange Commission that Aruze—Mr Okada’s gaming equipment company—may be willing to dispose of up to one million Wynn shares has certainly caught the attention of analysts.

It’s hardly likely that Mr Okada needs the money for his stalled casino project at Manila Bay in the Philippines. He’s had US$100 million in escrow parked in that scheme for the best part of two years without showing any signs of being anxious to get it back.

What other reasons could Mr Okada have for reducing his holding in Wynn? One could be concern that the recent uncertainty about land rights on Cotai and government talk of a tendering process under the new Land Law will push back the opening date of Wynn Cotai beyond the hoped for launch in 2013.

Another could be that even if Japan does pass enabling legislation for casino resorts, there is no guarantee that US-based operators such as Wynn and Las Vegas Sands Corp will be able to set up an operation there whereby they hold a majority stake.

According to a source who is an investor in Asian Gaming markets: “The Japanese are not short of cash. There are plenty of conglomerates in Japan with cash.

“They can only earn a quarter of a percent or so on their capital via the bank. Under those conditions, a project like an integrated gaming resort in Japan looks very attractive to Japanese investors. Why would they give a project like that to a foreign company? A foreign operator might be able to take a minority stake and possibly do a branding deal, but I don’t think they would ever own it. I can’t see Steve Wynn wanting to get involved in something in Japan unless he had control of it.

“A person like Kazuo Okada won’t just be sitting there waiting to see how things work out for Steve Wynn in Japan. He will be talking to his Japanese business associates and seeing if there are any strategic alliances that can be made to form a domestic consortium.

“The reason the Americans were able to write the cheques for multibillion dollar resorts in Macau is that the incumbent SJM neither had the experience of running mixed use gaming resorts, nor probably had the risk appetite to sink that much money into a still-unproven market. SJM knows casino gaming, and so far has stuck to that, though that could change if their plans for an integrated resort come to fruition.”

Current Issue

2017 Inside Asian Gaming Power 50: Meet the Selection Panel

2017 Inside Asian Gaming Power 50: Meet the Selection Panel Andrew W Scott CEOInside Asian Gaming Inside Asian Gaming’s CEO first entered a casino in 1986, fell in love with the surrounds and has been around them ever since. Andrew founded World Gaming Group and launched WGM in 2009, took over IAG in 2015, debuted a third magazine called High Life in ... Tuesday, 05 December 2017 19:28

2017 Inside Asian Gaming Power 50: Ten Years On

2017 Inside Asian Gaming Power 50: Ten Years On A decade of making the Asian Gaming Power 50 By Andrew W ScottIAG Asian Gaming Power 50 selection panel Chairman EVERY year for the last decade, Inside Asian Gaming has completed a task that is fascinating, exhilarating, intellectually stimulating and industry-defining whilst simultaneously bei... Tuesday, 05 December 2017 19:12

2017 Inside Asian Gaming Power 50: Number 19 -  James Murren

2017 Inside Asian Gaming Power 50: Number 19 - James Murren 19 James Murren CHAIRPERSON AND EXECUTIVE DIRECTORMGM China Holdings POWER SCORE1,165 LAST YEAR12 CLAIMS TO FAME • Chairman of the world’s second largest casino company • Credited with keeping MGM Resorts afloat during the GFC If the strong domestic results achieved by MGM China’s pa... Tuesday, 05 December 2017 14:44

2017 Inside Asian Gaming Power 50: Number 18 - Chen Lip Keong

2017 Inside Asian Gaming Power 50: Number 18 - Chen Lip Keong 18 Chen Lip Keong CEO AND EXECUTIVE DIRECTORNagaCorp POWER SCORE1,234 LAST YEAR20 CLAIMS TO FAME • Casino monopoly within 200 kilometers of Phnom Penh runs to 2035, license to 2065. • Owns 65% of first gaming company ever listed in Hong Kong • NagaWorld extension Naga2 debuted in Novemb... Tuesday, 05 December 2017 14:39