* First bill to legalize casinos in Japan due within months
* Dynam chmn plans to announce deal after first bill passes
* Japan could become world's third-biggest gambling market
(Adds names of Dynam talks partners, chairman comment)
By Farah Master and Nathan Layne
TOKYO, April 8 Pachinko hall operator Dynam
Japan Holdings Co is in talks with several Asian
gaming operators to build a casino in Japan as the country's
parliament prepares to debate a bill that would legalise casino
gambling for the first time.
Yoji Sato, Dynam's chairman and one of Japan's wealthiest
businessmen, said the company wants to announce a partnership
with an Asian operator once an initial bill is passed that will
start the process of legalizing gambling. Analysts say Japan
could become the world's third-biggest gambling market with
annual revenue of over $40 billion.
Proponents of the bill expect debate to start next month,
and aim to pass it before parliament session ends in June. They
say casinos could be in operation by the time Tokyo stages the
2020 summer Olympic Games, boosting leisure industry spending.
Sato said Dynam has already held talks with Macau-based
operators Melco Crown Entertainment Ltd, SJM Holdings
Ltd and Galaxy Entertainment Group, as well
as South Korea's Paradise Group and NagaCorp Ltd,
which has a casino in Cambodia. His comments mark the first time
a Japanese company has disclosed a short list of potential
Paradise said it has looked at opportunities in Japan but
for now has decided not to pursue them. The other companies
named by Sato weren't immediately available for comment.
Japan's pachinko industry, which involves a game that
resembles a cross between slots and a pinball machine, has a
huge foothold in the country where one out of six adults is said
to play recreationally. Brokerage CLSA estimates Japan could
become the world's biggest market for gambling after Macau and
the United States, raking in revenue of at least $40 billion a
"Dynam's number one focus is on the casino opportunity in
Japan," Sato said, speaking to Reuters via video from his office
in Hong Kong, where the Japanese company listed its shares in
Sato said he would not necessarily seek majority ownership
of a casino project in Japan, but would want play a leading role
in operating it. If it were able to secure a license, Dynam may
look to raise funds in Japan, possibly through a listing or an
issuance of shares, he added.
Japan is widely viewed as a prize market for casino
operators due to its wealthy population and proximity to China,
home to some of the world's most prolific, and wealthiest,
gamblers. Countries from the Philippines to Russia are building
large-scale resorts to woo wealthy Asian gamblers.
If parliament approves the initial bill in the coming
months, bureaucrats can then start working on concrete laws that
would be incorporated in a second bill proponents aim to pass in
Non-Asian operators eyeing the Japanese market include Las
Vegas Sands, MGM Resorts International and Wynn
Japan is expected to open casino resorts similar to those in
Singapore, like Sheldon Adelson's Marina Bay Sands and Genting's
Resorts World Sentosa. Politicians in Japan are keen to attract
high-roller gamblers, as well as mass-market visitors who spend
on dining, entertainment and retail.
While the top global operators have for the most part
focused on Tokyo and Osaka, Sato said he wanted to target
regional markets outside big cities, such as potential sites in
Hokkaido to the north and the southern Kyushu area.
That would match Dynam's strategy for the pachinko market.
It has placed most of its 370 halls outside the city areas and
has been trying to expand the number of players by offering a
less expensive version of the game.
"I think the local area is better. There you can run a
stable operation targeting the mass market, with high-rollers
accounting for about 10 to 20 percent of your business," Sato
(Reporting by Farah Master, Nathan Layne and Emi Emoto; Editing
by Kenneth Maxwell)