Las Vegas Sands (LVS) managing director of global development George Tanasijevich wants his company to build an integrated resort in Yokohama that becomes an emblematic part of the city’s scenery and a major driver of the local economy, taking a page from playbook the operator uses in Singapore with the Marina Bay Sands (MBS).
While Tanasijevich, president and chief executive officer of Marina Bay Sands Pte. Ltd., is drawing inspiration from the glitzy Singapore venue he oversees, the executive also believes a LVS Yokohama gaming property should be distinctive and “completely different” from MBS and existing integrated resorts.
I want to build an iconic building like MBS. However, it should be a building completely different from MBS and other IRs,” said Tanasijevich at a recent symposium in Japan, reports Inside Asian Gaming (IAG). “I want it to be unique, complementing and integrating with existing infrastructure.”
In August, the operator of five Macau casinos said it’s focusing its Japan efforts on Tokyo and Yokohama, the country’s two largest cities.
It’s Going To Be Expensive
MBS opened in April 2010 and cost the Las Vegas-based company $5.88 billion in today’s dollars to build. The company is planning a $3.3 billion expansion at the Singapore property, including a fourth hotel tower that will feature more non-gaming attractions.
When it was built, MBS was believed to be the most expensive free-standing casino venue on record, but it has paid dividends for LVS and its investors because it has become, by some estimates, the world’s most profitable gaming venue.
In the third quarter, LVS generated adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.28 billion from its eight casinos, of which $435 million was derived from MBS, compared to just $93 million from the Palazzo and Venetian on the Las Vegas Strip.
However, the costs of building a Japanese integrated resort on par with LVS’ other properties could prove exorbitant. Industry analysts believe costs for a first-class venue in Japan could be as has high as $15 billion. At least one of the company’s executives has mentioned a price tag of $10 billion to $12 billion while another said the figure could be even higher.
In his symposium comments, Tanasijevich did not mention specific costs or spending constraints.
The Right Inspiration
Sands has long been viewed as one of the leaders in the Japan gaming license competition because politicians and regulators there want to emulate the Singapore model, which features highly profitable casinos that aren’t detrimental to the surrounding areas.
Lawmakers there believe integrated resorts will be integral to increasing tourism and helping Japan capture more convention business, something it’s lagged behind other Asian countries in doing. Tanasijevich is aware of the potential benefits a high end gaming property can bring to Yokohama.
“Of course [Yokohama] is a famous tourist destination, but I think it has more potential in its sense of existence,” said the executive, according to IAG.