Billionaire Okada bets to win with fine dining and casinos
HONG KONG - 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.