Country would draw mass-market Chinese
Japan will have to wait a little longer for legal casinos.
Union Gaming Securities Asia Ltd. has announced that casino resorts in the country are almost certainly “off the table for 2015” after the Japanese legislature, or Diet, chose not to convene a special section this fall. It’s the first time in a decade that the country’s two-chamber parliament has declined to hold the annual fall session.
“The legislative timeline now moves to 2016 for the first bill and 2017 for the second bill,” said analyst Grant Govertsen. He referred to two separate measures required to approve casinos in Japan—one to enact the legislation, and the second to deal with regulatory matters. Govertsen said a “large-scale IR” is not likely to open in Japan until at least 2020, the year of the Tokyo Olympics.
Govertsen added, however, that the country should be a big winner when and if it goes for legal casinos. “High-value mass-market Chinese customers are eschewing Macau and instead heading to new-to-them destinations—namely places like Japan and Korea,” he wrote. “Based on tourism data, the same mass-market customer that might not be coming to Macau as frequently as in the past is still spending lots of money on entertainment and leisure pursuits in the form of international travel.”
The volume of Chinese visitors to Japan has continued to skyrocket, with “year-to-date visitation up a staggering 117 percent to 3.3 million persons through August; this is on top of an 83 percent year-on-year comparison in 2014,” Union Gaming reported.
Those figures should prove compelling to the Diet, which has been considering a casino bill for years. Opponents of the bill, including religious leaders, fear that casinos could lead to problem gambling and associated social ills. However, CLSA has estimated that casinos in Japan could generate annual revenues of $40 billion, creating a market that is on a part with only to Macau and the U.S. And global gaming companies are eager to buy in. Interested investors include the Las Vegas Sands Corp. and MGM Resorts International.
Casino supporters slightly outnumber opponents in the parliament, but the opposition is powerful and includes the Buddhist-backed Komeito, the LDP’s junior coalition partner.
When the measure passes, Osaka and Yokohama are considered the best locations for integrated resorts, according to the Japan Times. And according to the World Casino Directory, the Japanese casino “revolution” is nigh.
“Although the talks have often reached a stalemate, the overriding feeling each time is that regulation is inevitable,” the publication reported. “There’s no doubt Japan will want to join the action and its Prime Minister, Shinzo Abe, could be the man to make it happen.”
Thirty new casinos could open in Asia in the next five years, brokerage CLSA Ltd. said in a September report published in mid-September. That would bring the total to 230, a number the region “can comfortably absorb.”