Japan could be a $23.8bn a year gaming market, though $16.5bn is more likely, Chris Jones of Telsey says in a 44-page analysis of Japanese casino potential.

Tokyo

The $23.8bn figure assumes casinos would take in about the same amount as they do in the US - 0.4 per cent of GDP. Jones thinks the Tokyo area can support two casinos with an $8bn project in Tokyo generating $5.2bn in gaming revenue and a somewhat smaller casino across Tokyo Bay in Yokohama generating $4.7bn.

A $6bn Osaka project could generate $3.8bn and large regional casinos in Hokkaido and Kyushu could generate $1.8bn each, Jones estimates. MGM Resorts, he notes, has expressed interest in Hokkaido.

And, while Jones expects Japan to legalise casinos this year, he has some cautions on the market: tourism has not met the government’s goal of 10 million a year, which compares to its 2016 goal of 18 million and 2020 goal of 25 million; Singapore comparisons, so often made, need to consider that Singapore draws many more tourists at 15 million; Japan’s population is expected to shrink from 128 million today to 97 million in 2020; Japanese casinos would take away about one-third of Korea’s casino business, which might prompt Korea to let its citizens play in homeland casinos, thus significantly harming Japan’s potential.

Jones doesn’t pick likely casino licence winners if gaming is legalised, but he points out that Las Vegas Sands has been working hard in Japan for several years, that Genting is well positioned and that both have the wherewithal to finance mega resorts.

Source: Fantini’s Gaming Report