By Farah Master
HONG KONG, May 15 (Reuters) – Kazuo Okada, the Japanese
billionaire engaged in a fierce legal battle with Las Vegas
casino tycoon Steve Wynn, is diversifying his pachinko company
with a string of his own restaurants and is negotiating to build
a casino resort in South Korea.
On Tuesday, Okada opened a 25,000-square-foot fine dining
complex in Hong Kong, the first step in an expansion plan that
includes an Okada restaurant in Shanghai scheduled to open in
September, and a dining complex in Tokyo due to open in
December.
In an interview with Reuters at his new restaurant, Okada
said his Universal Entertainment Corp would open five
Okada restaurants in Asia next year. After that he plans to
expand to major cities around the world, including New York.
“We want to be the No. 1 casino company in the world,” said
Okada, dressed in a dark suit and wearing a small pink and
purple flower. He is also building a $2 billion casino resort in
the fast-growing gambling destination of the Philippines that is
due to open in 2014.
The Hong Kong restaurant and Philippines casino have been 80
percent funded by Universal, said Okada, who is chairman of the
Tokyo-listed company. For future projects, he said the company
is considering the support of the private investors who make up
the remaining 20 percent.
Okada, whose net worth was put at $1.8 billion by Forbes this
year, has been trying to diversify the group’s core pachinko
business – the Japanese arcade game that rakes in about $20
trillion yen (US$250 billion) annually – into entertainment and
casino resorts in Asia.
He said opening hotels in jurisdictions where gambling is
not yet permitted, such as Taiwan, was also a possibility.
Until February, Okada was the largest shareholder in Steve
Wynn’s $12 billion Wynn Resorts Ltd. He had helped
bankroll Wynn’s operations for more than a decade.
The two fell out publicly in January when Okada filed a
lawsuit against Wynn for blocking access to financial documents
relating to a $135 million company donation to the University of
Macau.
Okada declined to comment on the case.
Analysts say the fallout will continue to vex the two
tycoons’ businesses until the legal battle is resolved. Lawyers
say that could take years.
Wynn, who recently received approval to build a new casino
in Macau, is also scoping out Asian markets, including the
Philippines and South Korea, where he does not yet have a
presence. Casino operators are racing to secure sites in Asia to
position themselves in the world’s fastest-growing gambling
markets, like the Philippines, or those that could bring hefty
profits, such as Japan, were they to legalize gambling.
FINE WINING AND DINING
Okada remains focused on building his empire. He’s using the
opening of his upscale Japanese, Chinese and Italian restaurants
on the waterfront that overlooks Hong Kong’s skyline as a
platform to launch his brand.
“We are not worried about the economy. It is always
changing,” he said, speaking through a translator. Seated in an
opulent VIP karaoke room under a bronze chandelier, Okada
shrugged off global growth jitters and concerns that China’s
growth was slowing.
“Other countries may get better,” he said, confident that
weaker-than-expected growth in China and parts of Asia would not
affect his upcoming Philippines casino.
Macau, the world’s largest gambling destination, is highly
sensitive to worsening credit conditions in China because of its
reliance on Chinese high rollers.
Through subsidiary K.O. Dining Group, established in 2011 to
spearhead Universal’s investment in restaurants, Okada has also
opened a 10,000-bottle wine cellar in the Hong Kong complex,
stocking vintages that include wine auction darlings Domaine de
la Romanee-Conti and Chateau Lafite Rothschild.
The wine cellar, decorated with light paneled wood and
encased in a large glass room in the center of the complex, is
only accessible by passing through electronic security.
Shares in Universal have lost nearly a quarter of their
value since January, when Okada made the accusations against
Wynn.
Wynn redeemed the former vice chairman’s shareholding in
February, alleging that as a board director Okada had violated
U.S. anti-corruption laws.
For Okada’s Japanese restaurant in Hong Kong, called Kazuo
Okada, he has hired the executive chef from Wynn’s Okada
restaurant in Macau. It will specialize in Kaiseki – a
traditional multi-course Japanese dinner – and premium sake.
The Shanghai venue will open in the Portman Ritz-Carlton
hotel this September. Okada is also looking to expand elsewhere
in China.
PACHINKO TO PREMIUM LUXURY
Okada’s push into casinos and luxury dining is a departure
for the former engineer whose specialty has been developing and
manufacturing pachinko machines.
A YouTube video by Universal subsidiary Tiger Entertainment
offering an early look at Okada’s Manila Bay Resorts property
shows an exterior similar to Wynn’s sleek bronze landmark in
Macau.
The video shows ample natural light and greenery as well as
an expansive lake at the center with “dancing” fountains.
Like his former business partner Wynn, Okada is paying close
attention to detail as his company expands. Floor-to-ceiling
glass walls are a feature in his Hong Kong restaurants, while
his family’s traditional crest is incorporated into the walls at
his minimalist Japanese restaurant.
On his plans for a casino in Japan, Okada said he is
negotiating with the government. “Nothing is concrete for the
time being,” he said.
(Reporting by Farah Master; Editing by Prudence Crowther and
Douglas Royalty)
