As per media reports, Las Vegas Sands Corp. (LVS) intends to make huge investments to set up a casino project in Japan, which is one of the largest untapped gambling markets in the world. Share price of this Las Vegas, Nev.-based casino and hotel operator shot up 4.4% after the announcement.
After dropping its plans to invest $30.0 billion in Spain, the company plans to focus on the Asian market. It intends to build resorts in Tokyo and Osaka. As per reports, Las Vegas Sands is opening offices in Japan and intends to work with a local partner with extensive knowledge of the local market.
Las Vegas Sands earns majority of its revenues from Macau, the only city in China where gambling is legal. Per the analysts, these huge investments will make Japan the second-largest market in Asia for gambling after Macau.
Currently, gambling is illegal in Japan with the exception of betting on boat, bicycle and horse races. However, encouraged by the success of Macau, Japanese lawmakers are considering the legalization of casino resorts and gambling and are likely to begin parliamentary discussions on the bill soon. Meanwhile, given Las Vegas’ success in Asian markets like China and Singapore, Las Vegas is considered to be a strong candidate to tap the Japanese market.
However, even if gambling is legalized in Japan, establishing a presence would not be an easy task for Las Vegas Sands. Other major global casino operators like MGM Resorts International (MGM), Wynn Resorts Ltd. (WYNN) and Melco Crown Entertainment Limited (MPEL) are also eyeing the market and have huge investment plans for Japan. Whether this Zacks Rank #2 (Buy) company succeeds in getting a first mover advantage is something that we need to wait and see.
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