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Melco counts on Japan's immigration bill to meet casino plans

CEO mulls hiring up to 20,000 foreign workers as it prepares to bid for license

Macau gaming tycoon Lawrence Ho, CEO of Melco, said that “anything less than building the greatest integrated resort ever built would be a shame” in Japan.  (Photo by Eri Sugiura)

TOKYO -- Hong Kong-based gaming and entertainment company Melco Resorts & Entertainment will bring in thousands of foreign workers to its planned resort in Japan under the new immigration law that is expected to be enacted by the end of the current parliamentary session on Dec.10.

Melco CEO Lawrence Ho said: “[Initially] we will need to bring in foreign expertise, just like how we did in Macau and Manila [where Melco operates]. We expect employees of between 10,000 and 20,000 will be needed, so we need help on [the] immigration side.

“As part of Prime Minister [Shinzo] Abe’s reform packages, labor immigration is a key one,” he told the Nikkei Asian Review on Thursday.

The immigration bill, widely criticized by the opposition, will allow 14 industries to employ foreign workers, including hotels, restaurants and construction. Melco’s iconic resort in Macau, Studio City, hires approximately 5,000 people and only roughly 20% are dedicated to the gaming sector. The company said around 20% of its staff there are employed in the hotel and restaurants.

“The bulk of employees will be Japanese [eventually],” Ho added, saying that the company would adopt the trend set in Macau and Manila. “But at the same time it is unrealistic to say so from the beginning, as the industry does not still exist in Japan.”

The foreign worker bill, which was passed by Japan’s lower house on Nov. 27, will allow blue-collar workers to apply for permanent residency. Critics argue that the law would open Japan's door to a flood of immigrants.

Prompted by a serious worker shortage due to a rapidly aging society, the government hopes to bring in up to 345,150 foreigners over the next five years, on top of those who are accepted as trainees. These trainees are restricted to working for a particular employer and only for up to three years.

Japan legalized the operation of casinos in integrated resorts in July. These resorts are developments with hotels, restaurants, conference and entertainment facilities. The first of these resorts is expected to open by 2025, and Melco is among the multinational corporations eyeing expansion into the untapped market.

Ho said Melco will invest “more than $10 billion” in Japan, one of the biggest such investments in the sector. Ho said that amount is solely based on land and construction and does not include the training costs of employees and operational costs. “Anything less than building the greatest integrated resort ever built would be a shame,” he added.

Melco’s investments, however, need to be finalized through talks with local Japanese partners. It needs to form a consortium to participate at bidding processes opened by local authorities. Such bids are expected to start from the end of 2019.

Melco’s iconic resort in Macau, Studio City, hires approximately 5,000 people.   © AP

Ho said Melco has been talking to several companies as potential partners, including some for more than 10 years, and is “waiting for them to decide as we are ready.”

Ho said Japanese companies became much more willing to engage after the passage of the casino law in July. “It is less important for us what industry they are in,” said Ho, “but we are focused on companies headquartered in one city [that the company is seeking to apply to operate in] and who have long relationship with the local area.” Ho is targeting Osaka and/or Yokohama, and Melco would want to be the major partner in any consortium.

“We are quite prepared and on good track,” Ho said. Despite his confidence, some experts suggest that finding appropriate partners that are willing to be involved in such large investments may not be an easy task. 

Japan has struggled to boost investments by private companies. According to the government, private investment in the country fell 0.3% to 83.1 trillion yen ($736 billion) in 2016 compared with the previous year. Integrated resorts was one of Abe's hopes of turning around the economy. 

For now, only some construction, railway companies and pachinko pinball operators have publicly announced their willingness to become involved in integrated resorts.

“Casino has [the] reputational risks of gambling addiction,” said Takashi Kiso, CEO of the International Casino Institute in Tokyo. “Along with risks of not being approved for license at bidding process, Japanese firms are currently rather silent in public.”

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