Mohegan Gaming Cements Hokkaido Commitment, Opens Inspire Integrated Resort Office in Japanese Prefecture

Posted on: October 17, 2019, 12:09h. 

Last updated on: October 17, 2019, 01:07h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Mohegan Gaming and Entertainment (MGE) is confirming its status as a player in the competition to land a gaming license in Japan, announcing the recent opening of an office in the city of Tomakomai in the Hokkaido prefecture.

Mohegan Gaming is looking to bring one of its Inspire integrated resorts to Hokkaido, Japan. (Image: Travel Weekly)

Many of the major commercial gaming companies vying for a Japanese permit, including Las Vegas Sands, MGM Resorts International, and Wynn Resorts, among others, have announced plans to focus their efforts on Tokyo, Yokohama and Osaka – Japan’s three largest cities. In addition to those locations, Hokkaido is one of several others positioning itself as a destination for one of the country’s first three integrated resorts.

MGE’s newly minted Tomakomai office is aimed at giving locals some insight as to the company’s plans for a gaming venue there, and is also the headquarters for the operator’s Japan team.

At the Tomakomai Office, we plan to install not only the Mohegan company profile, but also a book that summarizes Mohegan’s corporate philosophy and CSR and an IR vision book,” according to the Connecticut-based company.

In addition to its flagship Mohegan Sun property in its home state, MGE operates seven other casinos, and will manage Virgin Hotels Las Vegas, the former Hard Rock, when that venue opens next year.

Cost Estimates

MGE recently said it expects its Inspire Entertainment Resort Hokkaido will come with a construction cost of $3.5 billion to $4.5 billion. That seems low compared to some of the other figures that have been quoted on Japanese integrated resorts.

Earlier this year, Wynn Resorts said it that if it’s one of the winning bidders, it could spend $8 billion to $9 billion to build the world’s largest casino in Japan.

Even those numbers, which are well above MGE’s forecasts, seem low relative to outside projections. A team of Fitch Ratings analysts that recently visited the Land of the Rising Sun came away with an increased cost estimate of $10 billion to $15 billion, up from a prior view of $10 billion, for a high-end gaming project in Japan.

International Exposure

Tribal gaming venues are major contributors to the domestic gaming industry. But Mohegan also operates outside the US, including a current Asian footprint via the Inspire integrated resort in Incheon, South Korea. MGE also runs two casinos in Canada.

Additionally, the company is competing with Hard Rock International to develop a casino-resort project at the old Hellenikon International Airport near Athens. Greek regulators are expected to announce the winning bidder in November.

Regarding MGE’s Japan effort, Hokkaido is the northernmost of the Japanese islands, is the largest by area, and home to more than to 5.28 million people. Due its northern geography, Hokkaido is colder in the winter months than other parts of Japan, and lures travelers with skiing and winter sports attractions, potentially providing a built-in stream of tourism should an integrated resort be constructed there.

Sapporo, Hokkaido’s capital, has 1.90 million residents, making it the fifth-largest Japanese city, well behind Tokyo, Yokohama and Osaka.