TOKYO -- The City of Yokohama will bid to host a large resort that will include a casino, Mayor Fumiko Hayashi announced on Thursday.
The Japanese government has announced a plan to build three so-called integrated resorts, with Osaka Prefecture currently the leading candidate to land one. Yokohama will be the second major city to put in a bid for a site. In the Kanto region around the capital, the Tokyo Metropolitan Government and the city of Chiba are also discussing bids.
Yokohama hopes an integrated resort will help attract visitors from Japan and abroad to the city for exhibitions and international conferences. It seeks to cash in on its proximity to the capital and Haneda Airport, as well as the presence of international exhibition center Pacifico Yokohama and other facilities.
Casino resort operators responded quickly to the news, with U.S.-based Las Vegas Sands announcing the same day that it will switch from pursuing a possible development in Osaka, the company's original preference, to Yokohama.
Sands seeks to drive organic growth in part by targeting "new development opportunities that allow us to maintain our industry-leading returns on invested capital," Chairman and CEO Sheldon Adelson said in a press release. "We think an investment in Tokyo or Yokohama gives us the best opportunity to do exactly that."
Sands Managing Director George Tanasijevich told the Nikkei Asian Review in May that the company was interested in Osaka, Yokohama and Tokyo, but "identified Osaka as the number one priority," as it was the only city that had decided to move forward with obtaining a license.
Melco Resorts & Entertainment of Hong Kong also announced on Thursday that it will establish an office in the Minatomirai area of Yokohama in a few months. "Yokohama offers the perfect platform on which we build the world's greatest integrated resort, something I hope we can all do together," said Lawrence Ho, chairman and chief executive.
The candidate site in Yokohama is to be Yamashita Pier. The city government has concluded that integrated resorts will bring economic benefits, including increased spending by visitors.
According to one analysis, an integrated resort in Yokohama would bring a windfall of 770 billion yen to 1.65 trillion yen ($7.2 billion to $15.4 billion) a year.
But forming a consensus will be a challenge as residents and port officials have expressed strong concerns over gambling addiction and security problems.
The city plans to submit a supplementary budget of about 300 million yen to the regular city assembly in September. A new organization tasked with inviting an integrated resort to the city will also be established.
Hayashi initially was positive about inviting the integrated resorts, saying that such facilities are necessary for sustainable growth of the city. But she reversed her position before the 2017 mayoral election and repeatedly said the plans had to be reconsidered.
Despite the mayor's cautious stance, the city has disclosed project proposals gathered from operators that are positive about integrated resorts. It has also held briefing sessions for residents.
While the Yokohama Chamber of Commerce and Industry supported the idea of bidding for a resort, a new organization consisting of port officials based at Yamashita Pier is opposed to the idea. Amid strong opposition from residents, the city will be required to make a strong case for hosting a gambling zone.
Nikkei staff writer Eri Sugiura in Tokyo contributed to this report.