Caesars Surprise: Company Joins Clairvest in Pursuing Japan Casino License

Posted on: September 29, 2021, 09:48h. 

Last updated on: September 30, 2021, 09:37h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Caesars Entertainment (NASDAQ:CZR) pulled a surprise Wednesday, announcing it’s joining Clairvest Neem Ventures K.K.’s consortium. That group’s seeking to bring an integrated resort to Wakayama, Japan.

Clairvest Neem Ventures is a unit of Canadian private equity firm Clairvest Group, and is the lone group angling to construct a gaming venue to the Kansai region. The city recently ratified a $4.3 billion proposal with the investment group, becoming the first Japanese city to come to terms with a partner.

The emergence of Caesars as the possible operator of a Japanese integrated resort is a 180-degree turn for a company that appeared squarely focused on the US. When the company known as Eldorado Resorts announced its bid to acquire “old Caesars” in June 2019, CEO Tom Reeg said at the time opportunities to venture into international markets would need to be “stupendous for us to be running in that direction.”

Reeg is chief executive of “new Caesars.”

Caesars is an iconic brand, and we are proud to partner with CNV to bring it to Japan,” said Reeg in a statement. “We believe our experience blends perfectly with CNV’s and look forward to creating something special with them for the Kansai region.”

The statement didn’t include details on Caesars’ financial commitment to the Wakyama project. But it’s possible the US casino behemoth is taking an approach similar to that of rival MGM Resorts in Osaka, where the Bellagio operator is taking a minority stake in order to defray risk and capital costs.

Caesars Could Finally Get Its Asia Footprint

Caesars’ experience in Asia is riddled with missteps and “could have been’s.” In 2001, the company didn’t go after a Macau license when the Chinese territory was opening to foreign operators.

Fast-forward to August 2019, and Caesars departed the Yokohama integrated resort bidding process. That proved fortuitous, because rival operators eventually did the same, and the city’s newly elected mayor recently quashed casino plans.

Soon before Eldorado made its acquisition offer, Caesars abandoned pursuit of a casino-resort license on Australia’s Gold Coast. Earlier this year, the company pulled out of an integrated resort project on Yeonjong Island in South Korea. At that time, Reeg wryly said the company sold its stake in the Korea project “for some barbecue pork.”

Wakayama Effort Looks Credible

Federal officials have yet to select cities for the initial three Japanese gaming licenses, and it’s likely to be 2026 or later before even one of the venues opens, But Wakayama seems ideally situated to procure one of those permits.

With Yokohama out of the picture, Osaka and Wakayama are in enviable positions in the Japan integrated resort competition.

Additionally, the Clairvest consortium is willing to devote $4.3 billion to the endeavor, far more than the $2.5 billion than the city was hoping for.

Plus, the addition of Caesars to the group only bolsters its gaming credibility, which was already extensive, as Clairvest controls gaming venues in the US, Canada, and Chile. William Weidner, former president and chief operating officer of Las Vegas Sands, is part of the group, as is Bradley Stone, former president of global operations and construction at LVS. Also in the mix is Garry Saunders, former chief operating officer of Melco Resorts & Entertainment and vice president of international operations for Sands.