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Native American Casinos Eye Japan, Ignore Chief Wahoo At Home

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Japan’s upper legislative house has passed gaming addiction legislation and begun debate on the Integrated Resort Implementation Bill, the final step for casino legalization in the world’s third largest economy. If the bill passes, the real fun starts, as localities and companies begin jockeying for one of three licenses to construct what will undoubtedly rank among the world’s most expensive and unique casino resorts.

Japanese pachinko moguls Hajime Satomi and Kazuo Okada have been waiting for this moment all of their business lives. Satomi’s Sega Sammy owns 45% of Paradise City, South Korea’s first integrated resorts, opened in April last year in partnership with Korea’s top foreign casino operator Paradise Group at Korea’s international gateway Incheon airport. Universal Entertainment founder Okada, the former Wynn Resorts vice chairman, opened Okada Manila in December 2016, featuring the world’s largest dancing fountain. After ousting Okada from management last year, Universal seemingly has recommitted to the Philippine resort by hiring a new chief operating officer. Many experts believe Japanese companies with IR experience hold valuable cards in the competition for a license.

Conventional wisdom, however, gives the inside track to the global casino big names, starting with Las Vegas Sands and Genting Group, the IR licensees in Singapore, the destination seen as a template for Japan. Caesars Entertainment counts itself among the global giants but isn’t in Macau, so avoids regulatory issues that the junket system there presents.

On the other hand, Macau casino operators believe they have an edge from their experience with mainland Chinese travelers that increasingly dominate global tourism. Lawrence Ho-led Melco Resorts has pledged to do “whatever it takes” for a Japan license. Galaxy Entertainment, controlled by multibillionaire Lui Che Woo and family, has stakes in Monte Carlo casino operator Societe des Bains de Mer and Wynn Resorts that potentially broaden its appeal.

Asian gaming companies outside Macau, such Philippine billionaire Enrique Razon’s Solaire and Saipan’s Imperial Pacific International, hope to get in the mix, particularly for potential sites outside Osaka and Tokyo. These so-called regional destinations are attracting interest from U.S. casino operators beyond Las Vegas such as Neil Bluhm chaired Rush Street Gaming with locations in Chicago and Philadelphia.

The standout U.S. regional players at this year’s Japan Gaming Congress were three major Native American casino operators. Hard Rock, which Florida’s Seminole tribe bought in 2007, has global brand power and presence plus former Sands China and Trump Organization CEO Ed Tracy, one of gaming’s genuine good guys, heading its Japan push. Foxwoods, owned and operated by the Mashantucket Pequot tribe, believes its rural Connecticut base resembles many of Japan’s regional settings. President and CEO Felix Rappaport, a Las Vegas fixture for decades who joined Foxoods in 2014, died suddenly in June, but there’s no indication Foxwoods plans to change course. Mohegan Gaming and Entertainment, also based in Connecticut, has additional casino operations in Atlantic City, Pennsylvania and Washington state and is building a Korea IR on the other end of Incheon airport from Paradise City.

In Japan, Native American operators can cite kinship with distinct native ethnic groups in regional destinations such as Hokkaido. Moreover, unlike publicly listed companies, tribal owned operators aren’t subject to quarterly earnings reports pressure so can take a longer view. “We as a tribe, our main goal is to ensure the sustainability and continuity of our constituents for not just one year, not just five years, but for 13 generations,” Mohegan Gaming CEO Mario Kontomerkos says.

But these companies aren’t nearly as keen to play the tribal card at home, acting as if they’re innocent bystanders in a controversy involving Native Americans and Major League Baseball, heavily supported by tribal casino advertising.

The Cleveland Indians baseball team was named for Louis Sockalexis, a Native American who starred there in 1897. Fifty years later, the team debuted a logo now known as Chief Wahoo, a scarlet red caricature of a grinning Native American with a single feather in his headband.

For decades Native American rights activists have urged the team to ditch the logo and even the Indians name. In January, over protests from team ownership, Major League Baseball Commissioner Rob Manfred ordered Chief Wahoo off Cleveland uniforms and barred national sales of logo merchandise starting next year.

Tribal casino operators and their trade group, National Indian Gaming Association, did not comment on the Chief Wahoo decision, despite their high profile ballpark presence. Along with Major League Baseball, they also ignored a suggestion published by Las Vegas’ CDC Gaming Reports that proceeds from Chief Wahoo merchandise sales and some percentage of tribal casino ballpark advertising spending and revenue be dedicated to youth baseball in Native American communities.

Count tribal casinos’ ability to look the other way and sidestep unwelcome controversy as another advantage in their Japan license quest.

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