TOKYO Hard Rock Cafe International is looking to buy up to a 60 percent stake in a Japanese casino resort, its chairman said on Tuesday, seeking entry into what could become the world's second-biggest casino market.
Hard Rock, famous for its music-themed restaurants, last month opened a Japan unit with a view to grabbing a slice of the action after the country's legalization of casinos.
Japan's regulation of the sector is expected to be laid out in law by December and Florida-based Hard Rock is among a crowded field -- including Las Vegas Sands (LVS.N), Wynn Resorts (WYNN.O) and MGM Resorts International (MGM.N) -- vying for potentially lucrative operating rights.
Hard Rock, which has 11 casinos in North America, is seeking to partner Japanese companies in a consortium, Chairman James Allen told Reuters.
"We are looking at 40-60 percent equity participation," he said. "It's important to make sure our local partners are involved in the relationship, not just as blind investors."
The company, privately owned by Seminole Tribe of Florida, has identified 20 to 30 potential partners, including financial firms, manufacturers and landholders, Allen said.
Its Japan arm will be run by Edward Tracy, a 30-year casino industry veteran who until 2015 was chief executive of Las Vegas Sands' China arm. Tracy and Allen first worked together at Donald Trump's conglomerate in Atlantic City in the late 1980s.
Two "integrated resorts" -- large-scale complexes featuring casinos, hotels and retail outlets -- could generate $10 billion in annual revenue, potentially growing to $25 billion with more locations, said brokerage CLSA.
Other analysts have said that Japan's wealthy population and tourist appeal could lift the figure to $40 billion, making Japan the second-biggest casino market behind the United States.
Sands' chief executive Sheldon Adelson said separately on Tuesday that a resort could cost up to $10 billion to build.
Though political sources have said that Japan is unlikely to decide on casino locations and operators until 2019, with the first casinos opening by 2023, the race among potential investors is well and truly on.
"At some point it will be all hands on deck," Tracy said. "When you get definition around the legislation, you are on the bullet train, and hopefully you're not trying to catch up."
(Editing by David Goodman)