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Rod Smith

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Park Place, MGM Mirage Consider Casinos in Japan

15 Dec 2003

By Rod Smith

LAS VEGAS and JAPAN -- At least two Las Vegas-based gaming giants seem be setting their sights on developing a major urban casino in Tokyo and have had recent discussions with representatives of the governor of Tokyo about development partnerships.

Park Place Entertainment Corp. and MGM Mirage have each had discussions with representatives of the metropolitan Tokyo government, industry officials said.

Japanese officials have been to Las Vegas to discuss possible development of urban casinos in Tokyo and Okinawa, but company officials said the conversations still are preliminary and "speculative."

Casino executives who asked not to be identified acknowledged the interest in Asian gaming, though, by saying: "Who wouldn't be interested?" when asked about the talks.

MGM Mirage spokesman Alan Feldman said his company is interested in developing such opportunities around the world.

Park Place Entertainment Corp. spokesman Robert Stewart added that Japan represents "a significant market opportunity."

"We think because of our experience with international opportunities and general partners that Park Place would be an excellent partner to work with entities in Japan," he said.

"Obviously, the government of Japan continues to sort out what it wants to do with casino gambling and we're monitoring that situation closely," Stewart said.

Deutsche Bank analyst Marc Falcone said it is likely that urban casinos will be developed in Japan in partnership with Las Vegas gaming operators.

"You're going to see (a lot of) interest in Japan and also other Asian countries such as Hong Kong and Taiwan as well. The opportunities in Asia are tremendous," he said.

He said developers such as Steve Wynn, who is developing Wynn Las Vegas, and Sheldon Adelson, owner of The Venetian, are also likely to be interested in building Tokyo casinos.

Wynn, however, said he was not aware of the discussions that have taken place with Tokyo officials, and Adelson could not be reached for comment.

But, Falcone said, "Just about every public casino company is interested (in forming development partnerships in Asia)."

University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said the discussions have focused on developing a casino boat in Tokyo Bay or an urban casino across the bay from downtown Tokyo.

"There's also talk of 11 or 12 other cities in Japan that want to have casino gambling and one is Okinawa (whose governor is also promoting legislation to allow casino gambling)," he said.

Japan is in the early stages of establishing the legal framework, developing a regulatory environment and setting tax rates for urban casinos.

Tokyo governor Shintaro Ishihara has seriously floated the idea of building a casino in the Tokyo Bay area, although critics doubt development will take place quickly enough to help solve the prefecture's current fiscal problems.

Junichiro Koizumi, the prime minister of Japan, has also been reported as backing legislation to make such developments possible, Thompson said.

The Parliament would have to pass legislation to enable casino development because gambling is banned in Japan, although there are exceptions to the ban, he said.

Pachinko, a cross between slot machines and pinball, isn't banned because it isn't considered gambling in Japan, he said.

Thompson warned that although Japanese interest in legalizing gambling is serious and getting more so, it may be a long time before development actually goes forward.

"That's just the nature of the Far East, although Macau happened quickly," he said.

Still, while developments in Japan might go slowly, "it would be a lot more amenable to (partnerships with) U.S. companies than the Chinese government. And I'm sure they'll be interested," Thompson said.

Analysts and industry insiders said Las Vegas gaming companies are setting their sights on offshore opportunities as the proliferation of gaming loses steam in this country.

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