Macau's Galaxy, Monaco's SBM team up in race for Japan casino licence

Thomas Wilson and Emi Emoto

* Galaxy, SBM to collaborate on Asia-Pacific casino projects

* SBM's Monaco state backers keen on Japan -Galaxy president

* No demand for majority stake in any consortium -Galaxy

president

TOKYO, March 29 (Reuters) - Macau casino operator Galaxy

Entertainment Group Ltd on Wednesday said it has

partnered Societe des Bains de Mer (SBM), hoping the

Monaco peer will help it trump rivals to win a license in

Japan's nascent gambling market.

Galaxy and SBM will jointly develop and run entertainment

businesses including casinos and hotels in Japan and the

Asia-Pacific region, the companies said in a statement.

"We intend to capitalise on the Monte-Carlo brand,"

President Michael Mecca told Reuters in an interview. "All of

the entities of Monaco and the principality ... are very

enthusiastic about joining us and doing business in Japan."

SBM is majority-owned by the Mediterranean principality, and

since 2015, 5 percent owned by Galaxy. The Monaco firm said it

hopes the partnership will help it grow in Asia.

Still, Galaxy faces strong competition to win rights to run

a resort in Japan, which legalised casinos late last year.

A host of international operators including U.S.-based Las

Vegas Sands Corp and MGM Resorts International

also aim to enter the market.

The government is drafting a law, due by December, on how to

regulate the industry, and people familiar with the matter have

told Reuters that Japan will likely pick locations and operators

in 2019 and open casino resorts by 2023.

Before the selection process begins, resort operators

including MGM and Hard Rock Cafe International Inc have been

forming consortia with prospective hosts and domestic companies.

Galaxy is also wooing national and local governments, as

well as real estate, construction and transportation firms, but

will not insist on a stake of over 50 percent in any consortium,

Mecca said.

"We are not coming with a preconceived notion or demand to

be a majority shareholder," he said.

Other operators have taken such positions, with Hard Rock

saying it would seek a stake of 40 percent to 60 percent in any

consortium.

Galaxy declined to detail the size of any investment in

Japan, but said its net cash of $2.1 billion would allow it to

begin a project without waiting for financing.

Sands and MGM have said a casino resort would need an

investment of up to $10 billion.

Just two casinos in major Japanese cities could generate

over $10 billion in annual gaming revenue, rising to $25 billion

if 10 further casinos outside metropolitan areas are approved,

brokerage CLSA has said.

(Reporting by Thomas Wilson and Emi Emoto; Editing by

Christopher Cushing)