Japanese lawmakers have yet to lay down the ground rules for the much awaited opening of the country’s casinos but global operators are already starting to jostle for a better market position.
A political source told the news agency that there’s a likelihood that Japanese lawmakers may require casino operators to team up with local authorities and bid for licenses to run integrated resorts.
Japan may greenlight two to three casinos, with locations and operators chosen by 2019 and the casinos open by 2023, the source further said.
Even if there are only two casinos operating in Japan, CLSA brokerage pointed out that the brick-and-mortar facilities could bring in $10 billion in annual gaming revenue. Other analysts peg the value of the Japanese casino market at $40 billion a year.
There’s much optimism in the Japanese market since lawmakers agreed to legalize casinos. For many operators, the market could bring a respite to the dwindling revenues in Macau as a result of Beijing’s crackdown on corruption and currency outflows.
CLSA noted that Las Vegas Sands, Genting Singapore Plc and MGM lead the chase in Japan due to their strong balance sheets and proven track records.
Learning its lesson a decade ago, MGM has been more aggressive in the chase, vowing to boost staff and resources to prevent losing out to Sands and Genting.
“The opportunity that Japan represents is one of the most significant anywhere in the world,” said Alan Feldman, MGM executive vice president of global government and industry affairs.
Japan, on the other hand, sees the casinos as fuel to attract more tourists and spur economic growth after the 2020 Tokyo Olympics. In 2016, there were at least 24 million tourists who visited the island nation.
But the question remains as to whether Tokyo can host an integrated casino resort given the city’s building height restrictions and its preoccupation with hosting the upcoming Olympics.
Most casino executives believe that Osaka and Yokohama have stronger potential for casino construction.
“How the selection process plays out will result in different kinds of strategies,” Grant Govertsen, an analyst at Union Gaming in Macau. “Regardless of the structure, there will be significant interest from international developers.”