Inside Asian Gaming

September 2015 inside asian gaming 21 Kazuo Okada Chairman Universal Entertainment “It was the year 2008 ,” pachinko mogul Kazuo Okada recalls on the home page of the website for his Manila Bay Resorts project, expected to open late next year. “A visit to the Philippines opened me up to the warmth, friendliness and hospitality of the Filipino people. Seeing the country’s enormous potential for growth and development, I decided that I want to be part of that promising future. “Fast forward to this day, my vision is not just to build a successful business, but to make it a global leader—and just as importantly, to share the good fortune that will come from that success with the Filipino people and their communities. “The property will be the world’s most magnificent casino resort. I hope that all Filipinos will be as proud as I am of what we will be achieving together in building it.” At first glance, Mr Okada personally pitching his $2 billion resort in Manila’s Entertainment City might smack of irony since the Philippines and Mr Okada have thus far arguably not helped each other’s reputations. Mr Okada made his fortune in Japan, graduating from juke boxes to pachinko machines, forming Universal Entertainment and its slot machine subsidiary Aruze. He became Steve Wynn’s partner after Mr Wynn was ousted from Mirage in 2000 following its takeover by Kirk Kerkorian and MGM Grand. Mr Okada staked Mr Wynn to the tune of $455 million over the next four years, receiving 20% of Wynn Resorts. Mr Okada’s money was instrumental in the development of Wynn in Las Vegas and Wynn Macau. In 2008, Mr Wynn famously declared of his vice chairman, “I love Kazuo Okada as much as any man that I’ve ever met in my life.” But love doesn’t always last. In 2008, Mr Okada, who owns 67.9% of Universal, obtained one of four gaming licenses in the Philippines’ Entertainment City zone for integrated resorts. Mr Okada thought his friend would join the project, but Wynn Resorts declined. So Mr Okada proceeded alone, assembling 44 hectares (109 acres), the largest landholding in Entertainment City, for his resort and forming Tiger Resort, Leisure and Entertainment to oversee the development. In 2011, Mr Okada and Mr Wynn began a very public brawl. Wynn Resorts said the Philippine project was inappropriate because it was a competitor to Macau—a notion few in the industry accept—and could threaten Wynn’s gaming licenses due to the country’s lax regulatory environment. Mr Okada was forced out as Wynn Resorts’ vice chairman. New accusations flew. Mr Okada claimed the animosity grew out of him questioning the company’s $135 million donation to the University of Macau, and he questioned Wynn’s Cotai land deal, A Reuters investigative report alleged Universal had paid $40 million to an associate of Efraim Genuino, Pagcor’s chairman under President Gloria Macapagal Arroyo. Wynn Resorts released a report by former FBI Director Louis Freeh that charged Mr Okada with ethics violations over $110,000 of hospitality granted to Philippine officials at Wynn properties in Las Vegas and Macau; besmirched Pagcor officials claim they received only routine courtesy accommodations. In February 2012, Wynn’s board of directors voted to buy back Mr Okada’s stock at a 30% discount payable over 10 years, a deal that cost him $800 million at the time. The stream of allegations prompted investigations in five jurisdictions, some of them still open. Japanese probers cleared Mr Okada, but the unpleasantness has likely doomed his dream of getting a casino license in Japan, and they haven’t helped Wynn’s prospects there either. Mr Okada also clashed with Philippine officials. Tiger’s license targeted completion of the project by 31st March this year, a deadline the company missed. Pagcor, which had already granted the company one extension, confiscated Tiger’s 100 million peso ($2.2 million) performance bond but has conditionally granted another extension until 31st December next year. Investigators say Tiger tried to circumvent laws requiring Philippine nationals to own 60% of the land and recommended charges against Okada and other executives. Tiger says it followed local legal advice and has since tried to find a local partner. It has fallen out with at least two potential partners and seems to have now settled on All Seasons Hotels and Resorts, controlled by Antonio Cojuangco, a cousin of current Philippine President Benigno Aquino III. Mr Cojuangco introduced himself to media as a participant in the project—though Tiger and Pagcor say regulatory paperwork on All Seasons has yet to be filed—at a late July topping ceremony for Manila Bay Resorts. And it’s the event that’s key. Throughout all the legal and financial woes, Mr Okada has kept building the resort that’s likely to be Entertainment City’s largest. The opening phase will include 1,000 rooms in two towers, a 30,000-square-meter (322,800 square foot) casino with 500 tables and 3,000 machines, a resort beach overlooking Manila Bay, a nightclub and two dozen restaurants. Mr Okada even founded a restaurant division, KO Dining, to develop food concepts and brands for the resort; its flagship Hong Kong restaurant serving traditional Japanese cuisine, dubbed Kazuo Okada, won a Michelin Star this year, as did its other Hong Kong-based outlet, Yu Lei, which features Shanghainese fare. Although he hasn’t necessarily done it the best or most efficient way, Mr Okada has remained dedicated to making Manila Bay Resorts happen and making it a success. That’s why he wants to put himself right out front on the website. Or maybe he’s showing what he learned from working for a decade with his estranged partner, who used to appear in TV ads for Golden Nugget in Atlantic City with the tagline, “My name is Steve Wynn, I run this place.” One thing’s for sure, if the Manila project wasn’t always personal for Mr Okada, it surely is now.