Japan could be the next Macau, generating $40bn a year in gaming revenues by 2025.
This is the view of Jon Oh of CLSA who has written a 136-page report on the potential of casino legalisation there. Oh expects the first phase of developments to open in 2021, consisting of large, urban-style integrated resorts in Tokyo and Osaka, along with a regional resort in Okinawa.
He predicts Tokyo’s casino will be developed on Odaiba and Osaka’s in the Bayside area. After seeing how well those three properties perform, the government is then likely to allow more casinos, with a total of up to 12.
Oh sees Las Vegas Sands as best positioned for a project, along with possible local Japanese partners Sega Sammy and Konami. Other possible winners include Genting Singapore, MGM Resorts and Wynn Resorts, he says.
As far as the legislationis concerned, there are several key areas of the bill Oh points to, including: a possible entrance fee for Japanese nationals; the required maximum period between passing the bill and putting the law into action has been reduced from two years to one; and the creation of an external government bureau to oversee the industry.
He thinks there are several factors that favour getting casino legislation passed this year. The election of Shinzo Abe as Prime Minister in 2012 and the landslide election win of his Liberal Democratic Party that same year were seminal events, he said.
The Liberal Democratic Party has been eager for the economic benefits of casinos and also recognises the symbolic importance of getting a bill passed after the issue has been in limbo for a decade and a half, he added.
In addition, the legalisation of casinos now has some powerful allies, including Abe, Deputy Prime Minister Taro Aso, former Tokyo mayor Shintaro Ishihara, Life Party head Ichiro Ozawa and Liberal Democratic Party heavyweight Hiroyuki Hosoda. Tokyo’s selection as the host city of the 2020 Summer Olympics also provided a boost.
While the general population of Japan remains largely under-informed on the entire issue, legislators are preparing to make their pitch to gain approval in the upcoming legislative session, Oh continued.
In a poll conducted by CLSA, only 35.9 per cent of respondents said they thought integrated resorts could boost the economy, while 24 per cent said they were unsure.
Source: Fantini's Gaming Report
