Tender from Yokohama to Just Genting Singapore, Melco
Posted: Jun 1, 2021, 9:25 a.m.
Last update on: Jun 1, 2021, 9:47 a.m.
As expected, Genting Singapore and Melco Resorts & Entertainment (NASDAQ: MLCO) are the qualified game operators to participate in Yokohama’s Request for Proposal (RFP) plans.
Japan’s second largest city made the announcement yesterday. Ultimately, one of the companies will be selected to partner with the city in its approach to the federal government to secure one of Japan’s first three gaming licenses.
Following Galaxy Entertainment Group’s departure from the Yokohama auction competition two weeks ago, four applicants have remained. But market watchers saw it largely as a two-horse race between Genting and Singapore.
Japanese Shotoku Corp. advanced to the tender, but its bid was rejected.
A surprise from Yokohama
While it’s no surprise that Genting and Melco were the last contestants left standing in the Yokohama fray, a somewhat unexpected scenario has arisen.
Confirming that Genting Singapore has moved forward on the bidding round, the city also revealed that the games company has partnered with local companies Sega Sammy Holdings and Kajima Corp.
However, this company, which is one of Japan’s largest pachinko machine makers, recently expressed concerns about Yokohama’s bidding process and going it alone. He also said that it might be a good idea to partner with a foreign company to better attract Chinese players to Japan.
The combination of Genting, Kajima, and Sega Sammy is potentially powerful, as it includes not only local businesses, but also operators with Asia-Pacific gaming experience. Genting is one of the largest video game companies in the region, while Sega Sammy is a minority partner of a South Korean integrated resort.
For its part, Melco works with the Japanese company Taisei Corporation.
Yokohama revealed its intention to obtain a gaming license in August 2019 and launched a Concept Request (RFC) in December of the same year.
Initially, there was a crowded field of competitors vying for partnership rights with the city. But concerns about costs and a lack of clarity on a policy framework have led to the withdrawal of Las Vegas Sands (NYSE: LVS), Wynn Resorts (NASDAQ: WYNN) and, more recently, Galaxy.
Genting and Melco have until June 11 to submit proposals to Yokohama. From there, the city will begin its selection process, with the goal of presenting land to the federal government in April 2022. Other competitors in the integrated resort race in Japan include the prefectures of Nagasaki and Wakayama and the city of Japan. ‘Osaka.
Yokohama officials are unlikely to comment publicly which group – Genting or Melco – is the leader. However, analysts speculate that it is Genting’s competition to lose. This thesis could be reinforced by the partnership of the video game company with Kajima and Sega Sammy.