Japan is one step closer to breaking ground on its first casinos. Wakayama has decided who it will contract with to build the prefecture's Integrated Resort. The lucky winner of the IR tender is a consortium led by Clairvest Neem Ventures. Clairvest Neem is a part of the larger Clairvest group, a Canadian equity management firm. They are now on track to be the first company to offer legal poker in Japan.
This is a big win for the Clairvest consortium. The entire application process has been dogged by complications.
First up, there were all the usual uncertainties that COVID has caused. Then on top of that, there has been widespread pushback from conservative elements in Japan. Wakayama played host to several anti-IR protests. Meanwhile, the national government was rocked by a gambling-based corruption scandal that almost landed on the Wakayama IR deal.
One of the other complications of the process is that not only are companies competing to be awarded the license. Cities and prefectures are competing to be the ones to give the licenses out. The national government has three more IR licenses to go. There are four other cities and/or prefectures competing for those three licenses. In turn, each of these cities and/or prefectures must select from possible contractors.
Now that the tender has been awarded, the operator selection committee revealed that the process had been so derailed that it had lost its lead candidate.
What happened to Suncity?
In a report dated April 30, 2021, the committee determined that Suncity was their top choice to take the IR contract. Suncity is a huge casino and property development group with casinos in Macau, and projects underway everywhere from Vietnam to Vladivostok. Suncity pulled out of the IR race in Wakayama on May 12, 2021.
In a statement at the time, Alvin Chau, CEO of Suncity, said, "Due to the COVID-19 pandemic, the uncertain situation surrounding a huge numbers of companies around the world may continue for a long time. The IR project procedure in Japan also is expected to take much longer. Therefore, we have considered the risks to our business and the fact that things are still uncertain and have decided to withdraw. [...] We would like to express our sincere gratitude to all concerned parties and local residents for their kindness."
This was good news for Clairvest, the only other company with a proposal filed in Wakayama.
Clairvest's investments in casinos
Clairvest and its partners will probably be much bigger players in the market now. The contract they've landed has some expectations of serious financial rewards. When analysts looked at Genting Singapore's tender offer for an IR licence in Yokohama, they predicted a jump of between 5% and 10% in share prices for the company.
The award of the Wakayama license marks a key shift in the Japanese casino market. The Clairvest contract is the first of its kind to be awarded. And will allow the public to see the rest of the process go from theory to practice. Up next, the city and consortium will need to get the government's stamp on the license.
Once established, Clairvest will no doubt be looking to lay on poker games to cash in on the growth of the game in Japan. Legalizing poker games will also take a huge revenue stream from organized crime.
Clairvest may have been second choice in a two-horse race in Wakayama. However, the consortium got off the start promptly. Very early in the tender process, Clairvest set up branches in the Hokkaido and Nagasaki prefectures. Despite this, the consortium was considered the underdog in the fight against the giant gambling groups against which it was competing.
In the end though, tenacity beat Suncity.
Featured image source: Flickr by Ken Ohyama
