Why has Galaxy Entertainment decided to join the race for a Japanese casino license?
Japan is the number one priority for us and is the market with the biggest potential. Two years ago we made a strategic investment in Monte-Carlo Société des Bains de Mer (SBM), with the aim of working together on the development and operation of entertainment businesses including Integrated Resort (“IR”) projects in the Asia-Pacific region – specifically Japan.
During that time we have been quietly listening and learning from many stakeholders in the community about how we can make the best possible contribution to society. We learned that Japan has great respect for European brands and wants the very best in World Class resort experiences, so we felt our collective brand offering the Best of Asia and the Best of Europe would offer Japan something completely different to all other IR operators.
What makes the Japanese gambling market so appealing for international casino operators?
Japan has thousands of years of unique culture, heritage, entertainment and cuisine that will ensure an IR experience will be unlike any other anywhere in the world. Japan has a large and wealthy population who enjoy world class experiences and entertainment and is also one of the most popular in-bound tourist destinations from many of the larger source markets of Mainland China, Hong Kong and Taiwan.
Although the Japanese government hasn’t made up its mind yet about where the IRs will be built, authorities say they will only grant two or three licenses for now. Why is Galaxy Entertainment’s proposal so unique? What makes you stand out from other candidates?
Unlike other operators who have expressed an interest in Japan, we readily accept that in order to be responsible and successful in that market we will need to work hand-in-hand with local business partners as part of a consortium. Wherever we do business, we are very selective about where we invest and bring our brands. Only those locations where we can add considerable stakeholder value – working with strong partners and the local community to ensure success, will be considered. And as a consortium we will evaluate all opportunities together and allocate equity and investment in the spirit of the partnership.
Sharing a common vision with the government and the communities in which we operate, as well as building strong partnerships with commercial organisations has been critical to GEG's success in Macau as it has been for SBM in Monaco. That’s why we believe it will also be the key route for any Integrated Resort development in Japan. We have spent considerable time meeting with and listening to many potential partners across all of Japan – candidly discussing the opportunities and challenges IR's can bring to the country.
We take our corporate responsibilities very seriously and believe in the spirit of open dialogue and transparency with local partners from the commercial, government and community sectors to ensure success for any future IR development. It’s important to note that GEG are the only IR company with a Japanese hotel partner – Okura Hotels and Resorts, a relationship built upon mutual trust and respect that has flourished for over 10 years and Hotel Okura Macau at our flagship resort Galaxy Macau is the most successful property in their portfolio worldwide. We have also formed a relationship with Paul Tange of Tange Associates who has joined our team as architect and design partner. For over 70 years, Tange Associates have been synonymous with epoch-making, contemporary architecture both in Japan and Internationally and we are very excited to have him as part of our team.
Tokyo, Osaka and Yokohama are emerging as possible locations. What are GEG’s top choices and why?
With the IR Implementation Bill still being formulated, it is still too early to answer that question. It will depend on how the law is applied and what sites are eventually selected by the central government. IR’s could be a huge catalyst for growth for Japan – helping to diversify the economy and boost tourism and we believe that Japan has a huge opportunity to create something unique that doesn't just follow the Vegas model seen in many other markets around the world.
We also believe that the GEG and SBM partnership represents something completely different to all other IR operators and whatever locations are chosen by the Japanese government we remain committed to delivering a world class IR for the citizens of Japan. It’s important to note that GEG have one of the strongest balance sheets in world gaming, with net cash of approximately HK$20b – ensuring that we could start a project in Japan very quickly.
Despite legalization, several studies conducted by public affairs consultancies have shown that gambling is still perceived as negative for the Japanese population. How does GEG plan to address this concern?
We believe it is essential to any IR bid in Japan that the community should be taken into consideration. Our track records in both Macau and Monaco show that we care greatly about the communities in which we do business.
In Macau, GEG have worked closely with the Government, Academia and the wider community to diversify the economy toward more non-gaming, boosting tourism, operating with the very best responsible gaming policies, creating tens of thousands of jobs, promoting local culture, developing spectacular world class IRs and entertainment experiences that everyone can enjoy and committed over USD160 million to local charitable and community causes through the GEG Foundation. Our partners SBM have also had a historical role in Monaco’s economic, social and cultural development for 150 years.
The Group is associated with all prestigious events in the Principality, notably through its partnership with AS Monaco Football Club, the Monaco F1 Grand Prix and its involvement in the Monte-Carlo Rolex Masters tennis. It also spearheads global charity events, notably the Rose Ball and the Monaco Red Cross Gala. SBM is also developing cultural synergies with GEG across Asia. The Monaco Opera recently performed in Tokyo and the Monte-Carlo Ballet Company will soon perform in the region. We will bring these same commitments to any project in Japan