IR bill could go to Diet in March
In a new report, Fitch Ratings says Japan integrated resorts can expect to generate about $3 billion per year in gross gaming revenues. Lawmakers in the country passed enabling legislation for casino resorts in December 2016, but still have not completed the regulatory piece.
Fitch’s projections for Japan were based “in comparison to other large-scale integrated resorts with favorable supply/demand dynamics such as Marina Bay Sands.” Fitch added that, as in Singapore, “Japanese gaming regulations are likely to impose restrictions, which will limit the market potential.”
At the ICE industry trade show in London, Ed Bowers, executive vice president for global development for MGM Resorts International, also warned that overly strict regulations in Japan could inhibit growth in the market and possibly cool the enthusiasm of potential investors. MGM has indicated it would invest about $10 billion in a Japan IR.
“If you apply too much pressure—a high tax rate, high entry free, or limit to the floor space—as you push one lever, it may have repercussions on other areas,” said Bowers speaking at a panel on the Japan gaming market.
He said investors and operators should be looking to offer more than gaming, adding meeting and convention facilities, broad-based entertainment options and other destination attractions.
Meanwhile, Akira Kurita of Japanese PR firm Hakuhodo Inc. told the panel that up to 50 percent of Japanese residents are against bringing casinos to the country; their chief concern is the possible growth of problem gambling in the country. That concern has prompted officials to consider regulations that could inhibit profitability in the sector.
Kurita added, “Growth in tourism is the main driver for doing this. These are important critical points—the government needs to go back to why they originally thought of this idea.”
According to GGRAsia, he urged industry representatives to communicate with Japanese lawmakers prior to the submission of the IR Implementation Bill to a parliamentary committee, which could happen in March.
“This is going to be a long journey, it could be 20 years in the making,” Bowers said. “I’m more hopeful that we see something more this year.”
The Fitch report said Japan’s integrated resorts should not affect Macau to a great degree, but “will have a more material negative impact on casinos in Korea and Vladivostok.”
Meanwhile, international visitors to Japan spent a record 4.41 trillion yen (US$40 billion) in 2017, reported the Nikkei Asian Review. Data from the Japan Tourism Agency said overall tourist spending increased 17.8 percent from 2016 and the number of tourists was up 19.3 percent, reaching a high of 28.69 million.
“Airlines have added flights and introduced larger aircraft on flights connecting Vietnam and the Philippines to Japan, which led to an increase in travelers choosing Japan as their holiday destination,” Akihiko Tamura, commissioner of the Japan Tourism Agency, told reporters.
However, per-capita spending by travelers decreased 1.3 percent year-on-year, the second straight annual decline, and trips are shorter: 9.1 nights versus 10.1 in 2016.
Though public support for IRs may be lukewarm at best, Asia Gaming Brief reports that incumbent Nagasaki Governor Hodo Nakamura, who was just reelected to office, hopes to bid for a casino license at Sasebo City’s Huis Ten Bosch theme park. A recent poll showed a majority of the prefecture’s residents are in favor of hosting an IR—a result “unknown” elsewhere in Japan, AGB reported.
