Photo/Illutration Dancers gave a performance at the booth of Las Vegas Sands Corp. when the Japan IR Expo was held at Pacifico Yokohama on Jan. 29. (Asahi Shimbun file photo)

Las Vegas Sands Corp., a major player in the global casino industry, is folding on its plan to develop an integrated resort (IR) facility featuring a casino in Yokohama, casting doubts on the future of Japan’s IR projects.

The announcement on May 13 followed the company’s sharply deteriorating balance sheet amid the global coronavirus pandemic.

“The framework around the development of an IR has made our goals there unreachable,” Chairman Sheldon Adelson said in a statement, suggesting it would be difficult for the company to recoup a huge investment into Japan under a 10-year license to be issued by the Japanese government.

Adelson said he decided Las Vegas Sands should focus its energy on other opportunities outside Japan.

The same day, Yokohama Mayor Fumiko Hayashi, who had antagonized residents by revealing the city’s controversial quest for an IR project last year after a long silence, put on a good face about Las Vegas Sands’ announcement, saying the city will continue pursuing a casino.

“There is no need for change in our program at the moment,” she said at a news conference.

Japan has striven in recent years to establish Las Vegas-style complexes including casinos, shopping arcades and large conference venues.

Chief Cabinet Secretary Yoshihide Suga, an IR proponent whose constituency includes parts of Yokohama, said that the government will proceed with planned IR projects.

“We anticipate no change in our timetable,” he said at a news conference on May 13. “Building IR facilities will be indispensable for Japan as it is aiming to become a tourism power.”

Local governments seeking to host integrated resorts are expected to submit their plans to the central government in 2021. Yokohama, the Osaka prefectural government and the Osaka municipal government have so far shown interest.

Up to three IR facilities will be built in Japan.

Las Vegas Sands has been hit hard by sprawling travel restrictions adopted by the international community after the coronavirus outbreaks.

Its sales from January to March plunged by 51.1 percent from a year earlier to $1.78 billion (190.4 billion yen), according to financial results released by the operator on April 22.

Operating profits dropped to $55 million, down 94.3 percent from the same period last year, leaving the company $51 million in the red.

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