Wynn Resorts Is Still Not Over Japan’s Integrated Resort Race

Article by : Helen Feb 24, 2021

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While Wynn Resorts has confirmed it quit on the Yokahama bid, the US-based casino operator is still considering other municipalities as a potential spot for its own casino in Japan, according to a report of Las Vegas Review-Journal dated February 3.

“Wynn Resorts continues to closely monitor the integrated-resort situation in Japan and views the country as a strong potential market,” the company said in a statement received by Las Vegas Review-Journal via email.

While Wynn’s positive pursuit of an IR development in the country is undiminished, it will not be participating in the upcoming request-for-proposal process by the City of Yokohama because there is not yet clarity regarding the post-COVID-19 international IR market nor the definitive national basic policy to meaningfully update our previously submitted plans and to complete, with the necessary detail, the documents published by the city.

Wynn Resorts had serious intentions towards Yokohama – the company even opened an office of Wynn Japan there at the end of 2019, but it was a shortly-lived endeavor. The office was shut down in August last year, citing the delay in the integrated resort timeline and the pandemic as the main reasons behind the decision.

Following the closure of the office, the company issued a statement saying, “The pandemic is having an unprecedented negative impact on integrated resort development, and resort companies such as Wynn are considering how we evolve our operations to align with a post-pandemic market. Long term, we remain interested in the Japan integrated resort market and will monitor the situation closely.”

The Yokohama request for proposals started as planned on February 5 and will last until May 17, giving the interested businesses a bit over three months to submit their qualification documents. After “a period of competitive dialogue,” the qualified competitors will have to submit their final proposals between June 1 and June 11 this year. The winner will be selected in summer 2021, with no specific date announced yet.

The fact that Yokohama authorities have gone through with the request for proposals means that the locals’ outcry against an integrated resort will remain discarded. More than 200 thousand Yokohama residents signed a petition to hold a referendum on allowing the construction of an integrated resort, but the city’s mayor shot down the idea this January.

As Wynn Resorts backed out of Yokohama, it doesn’t have many other options to choose from: Nagasaki’s first stage of RFP ended on January 28, while Osaka’s bid is bound to go to MGM Resorts. The only other viable option left is Wakayama.

It’s no wonder why the likes of Las Vegas Sands and Wynn Resorts are careful about throwing their hats in the ring. The integrated resorts are expected to become operational in the mid-2020s (2026 or 2027), which is a long-term commitment that is unappealing for some, especially amidst a pandemic that dwindled their sources of income.

Wynn Resorts reported a net loss of $2.07 billion in 2020, a hard fall from the company’s $123 million in net income the year before. All of its properties finished the year in the red, too.

On the other hand, the launch of WynnBet, the company’s own online casino and sportsbook, in three U.S. states so far, as well as Macanese properties’ return to a positive adjusted property EBITDA in 4Q2020, may serve as a sign these profits will help balance out this year’s losses.

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