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SPECIAL REPORT: Where to now for Nagasaki and Casinos Austria? (part 2)

Andrew W Scott by Andrew W Scott
Tue 14 Sep 2021 at 05:05
Japan’s Current Inc predicts annual Nagasaki IR sales of US$3.7 billion

Nagasaki

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Nagasaki Prefecture signed a basic agreement with Casinos Austria International Japan (CAIJ) on 30 August for the development of an integrated resort at Huis Ten Bosch at Sasebo City, Nagasaki. But the process has been controversial to say the least, with both of CAIJ’s rival bidders crying foul on the decision.

In this five-part special report running Monday to Friday this week, we take a closer look at Casinos Austria and speculate on what might happen from here on the road to creating Nagasaki’s first ever integrated resort.

Mon 13 Sep 2021        Part 1: Introduction and background
Tue 14 Sep 2021         Part 2: IR operational capabilities
Wed 15 Sep 2021        Part 3: Financial capacity
Thu 16 Sep 2021         Part 4: Meeting Japan’s expectations
Fri 17 Sep 2021           Part 5: Conclusions and challenges

PART 2: IR OPERATIONAL CAPABILITIES
Today let’s look at the actual physical IR that we’re likely to see in Nagasaki, and the capability of Casinos Austria to run such a resort.

Both of CAIJ’s fellow bidders, Oshidori and NIKI, have released a range of renderings of their proposed projects, with 10 images of Oshidori’s “The Sails at Omura Bay” project released here, and eight images of NIKI’s IR proposal released here. Both appear to be in the league of the serious multi-billion US dollar projects we’ve come to expect in Asia – comparable to the 20 or so modern day integrated resorts which have been created in the past two decades in Macau’s Cotai, Entertainment City in Manila, and Singapore.

Conversely, we’ve only seen two images of the as-yet-unnamed IR offering from CAIJ. The first, shown below, was published in a press release from CAIJ in their website, which was hastily withdrawn hours later. However, in the brief time it was online it was copied by numerous media outlets (including IAG) and is now widely available across the internet on industry media websites. This same image was also released by Nagasaki prefecture themselves when announcing the signing of the agreement with Casinos Austria, on 30 August.

A second rendering, shown below, was also published by Nagasaki prefecture as part of the 30 August announcement.

These are the only two renderings which have been released publicly. IAG contacted CAIJ some weeks ago asking if they would release more renderings, as Oshidori and NIKI did, but we were told they would not until the basic agreement was signed. That agreement was signed some 15 days ago, but despite several further requests from IAG, Casinos Austria has still not released any more renderings or information.

Does CAIJ have the track record and the capability to run a multi-billion US dollar modern-day Asian-style integrated resort? Consider the price tag mentioned by Nagasaki prefecture on their 30 August announcement – JPY 350 billion (US$3.2 billion). This amount is “only” about US$1 billion shy of the most expensive integrated resorts ever built in Asia – Wynn Macau and Marina Bay Sands. It is almost US$1 billion more than the cost of the behemoth Venetian Macao. These integrated resorts have thousands of rooms, hundreds of gaming tables, thousands of slot machines, 100 or more F&B outlets and up to hundreds of retail outlets. Their scale is nothing short of stupendous.

By contrast, as outlined in the July cover story of IAG, the nearest thing to an IR Casinos Austria International has ever run is the Reef Casino in Cairns, Australia, with around 40 tables, 500 slot machines and 127 hotel rooms. Most of their properties in Europe do not have hotels attached, and according to CAI’s own figures supplied to IAG, they average just 10 gaming tables and 147 slot machines per gaming property around the world.

In their defense, it must be noted that Casinos Austria is a long-standing and experienced casino company with a history going back to the 1960s. But it is a history of running very small-scale European clubs, nothing like the modern-day IRs to be found in Macau, the Philippines, Singapore or Las Vegas.

A PWC paper published in 2016 and entitled “Is Europe Ready for Integrated Resort Casinos?” comically reported the total number of integrated resorts in Europe as “zero”. Nothing has changed since 2016. Yes, there is a Resorts World in Birmingham, but its hotel has less than 200 rooms. Yes, Melco is building an IR in Cyprus, but it isn’t open yet. As of 2021 there are still no integrated resorts in Europe and the reality is that Casinos Austria, while they have indeed operated very many small European style club casinos over many decades, has zero IR experience.

They will need to learn fast.

Tomorrow in part 3 we examine issues of the financial capacity needed to create the Nagasaki IR.

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Tags: Casinos AustriaHuis Ten BoschirJapanNagasaki
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Andrew W Scott

Andrew W Scott

Born in Australia, Andrew is a gaming industry expert and media publisher, commentator and journalist who moved to Hong Kong in 2005 and then Macau in 2009, when he founded O MEDIA, one of Macau’s largest media companies and parent company of Inside Asian Gaming.

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