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JAPANESE HESITANT TO GAMBLE ON NEVADA

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Until pioneer Asian investors show they can make a profit in the gaming industry, the prospect of a large influx of Japanese casino owners and operators in Nevada is questionable, a prominent gaming lawyer said Thursday.

Anthony Cabot of the Las Vegas firm of Lionel, Sawyer and Collins made the comments during a panel discussion "The Japanese Experiment in Nevada" at the 12th annual Nevada Gaming Conference and Workshop at the Mirage resort on the Strip.To date, four southern Nevada hotel properties - the Aladdin, the Dunes, the Park and the Hotel San Remo - have been purchased by Japanese investors, Cabot said.

"Even with these investments, Las Vegas ranks low in major cities with Japanese investment. The Japanese have invested $4.42 billion in Honolulu, but their investment in Las Vegas is only about $300 million. In ranking, Las Vegas is No. 13 behind even Orlando, Fla.," he said.

And, the track record for Japanese investors currently is uncertain, Cabot said.

The Aladdin currently is in bankruptcy proceedings following the death last year of its owner Ginji Yasuda, while the Park, once owned by Katsuki Manabe, has been sold to an American investor.

Dunes owner Maseo Nangaku Wednesday announced a $200 million construction and remodelling project at the Strip resort.

The San Remo, owned by Sukeaki Izumi, has been licensed only a short while and has not yet established a track record, Cabot said.

The gaming lawyer said cultural differences and language barriers teamed with the complexities of obtaining a Nevada gaming license are major factors that make the gaming climate unattractive to potential Japanese investors.

"The greatest obstacle in the investigative process is the language barrier," Cabot said. "For example, simple interviews to verify the answers on the gaming application take about an hour with English-speaking applicants, but about five hours with persons requiring that the questions and answers be translated. This extra time consideration is repeated in the numerous interviews involved in the process."

He said the background investigation necessary to obtain a Nevada gaming license is further hampered by Japanese notions of privacy and difficulties in obtaining police records in Japan.

"Japanese are, by nature, very private and generally unwilling to converse with Americans regarding the personal attributes of other Japanese," Cabot said.

He outlined other difficulties in the licensing process and said the end result is that Japanese investigations are the longest and most costly probes in the history of Nevada gaming regulators.

"A major Japanese company considering purchasing a Nevada casino can expect to pay upward of $500,000 to $1 million in investigative fees and be subject to a yearlong investigation before even being considered for a casino license," Cabot said.

When legal and accountants' fees are added, he said, the cost of obtaining the license approaches $2 million.