in Wakayama prefecture, the project of building a casino is strongly compromised
Japan wants to build three large casino complexes by 2030. Just a few days ago, three Japanese prefectures were concerned with the construction of a hotel-resort with integrated casino: Osaka, Nagasaki and Wakayama. Unfortunately, for the last of them, the project could fall through. The local legislators rejected the development plan because of several grey areas related to financing.
Marina City Island resort-casino project stalls on financing
According to a press article published by our colleague Asian Gaming, the project to build a hotel-resort with an integrated casino in the south of the island of Honshu is more than compromised. Indeed, the 50.7 hectare plot of land located on the artificial island of Marina City may remain untouched by any infrastructure. The reason for this indecision: grey areas relating to the financing of the project in which Caesars Entertainment Incorporated, Clairvest Group Incorporated and AMSE Resorts Japan Company Limited are the major players.
Specifically, the 42-member Wakayama Prefectural Assembly voted against the implementation of the development plan for the proposed resort by 22 votes to 18. This decision was the result of concerns about the identity of the legal entity responsible for providing part of the approximately $3.7 billion needed to complete the project.
While Canadian private equity firm Clairvest Group has said it is prepared to put more than $715 million of its own money on the table, Caesars Entertainment has signaled strong commitments, with the Las Vegas-based group funding the project to the tune of $502 million. The remaining $2.4 billion, which dwarfs Nishimatsu Construction Company Limited’s $63 million stake, is expected to be loaned by global investment bank Credit Suisse Group AG.
Credit Suisse’s official commitment letter is missing
The Wakayama prefectural assembly would have been particularly discouraged by the fact that no official letter of commitment from Credit Suisse Group AG concerning the financing of the remaining expenses was attached to the application. This negative vote is not without consequences. Wakayama Prefecture made a decision not to submit its submission of information necessary for the construction of a hotel-resort to the Tokyo-based selection body.
Many analysts now expect the developers to withdraw from the process altogether. This would mean that only Nagasaki Prefecture and the giant city of Osaka would be left as the only candidates to build one of Japan’s future gambling facilities.