Second bill now on the table
Any global operator looking to bid on a casino license in Japan may benefit from a local partner. According to the Union Gaming Group, if the country passes Part II of its two-part gaming bill to legalize casinos in the country, pachinko operator Dynam Japan Holdings Co. Ltd. could be a logical candidate.
Dynam is “well-positioned for merger and acquisition opportunities as one of the largest and well-capitalized pachinko operators,” said Union analyst Grant Govertsen. He said Dynam has “one of the largest data sets of gaming-related customers and customer behavior based on its nearly 50 years of operations and market-leading position,” with 444 pachinko halls in its portfolio. “Given our belief that Japan integrated resort revenues will be driven primarily by locals, it would make sense for a potential integrated resort developer to make a strategic investment in Dynam.”
Last month, Fitch Ratings said Sheldon Adelson’s Las Vegas Sands Corp. is “best- positioned” in terms of its balance sheet among U.S. operators ready to bid on Japan. “MGM Resorts is also well-positioned to undertake an IR project,” the agency added. “Wynn Resorts has excellent liquidity, but has the highest leverage of the three operators.”
Asian operators looking at the Japanese market include Genting Singapore Plc, Paradise Co. Ltd. and Melco Crown Entertainment Ltd.
Gaming manufacturers are also looking to jump into the potential jurisdiction, reports the Las Vegas Review Journal; a major new market could provide “a shot in the arm” for the industry, the publication noted.
Marcus Prater, executive director for Nevada-based Association of Gaming Equipment Manufacturers, says four megaresorts could absorb as many as 16,000 slot machines, equaling the inventory in Macau. That number would also be equivalent to 20 percent of yearly North American sales, he said.
“It’s a stretch to call it a blockbuster,” said Prater. “Japan will not drive tens of thousands of machines annually, but we welcome any new business out there.”
U.S. manufacturers, like U.S. operators, will likely look for Japanese business partners such as Konami Holding Corp. and Sega Sammy Holdings. Gaming industry consultant Howard Klein predicts equipment demand including slots and tables could range from 15,000 to 25,000 units.
“Japanese makers in my view will be a major looming presence in that business,” said Klein. ”I totally expect global leaders like International Game Technology and Scientific Games to be linking up with Japanese companies—to partner or establish branches there.”
“Partnerships are certainly a possibility. We do that in many locations around the world,” said Derik Mooberry, group chief executive of gaming at Scientific Games.
