A Japanese casino industry made of two major casino resorts and a regional property could eventually generate gross gaming revenue (GGR) of US$7 billion to US$8 billion per year, says brokerage Sanford C. Bernstein.
“If only one metropolitan area is selected with two regional integrated resorts (IRs), the revenue would be lower, We would estimate with two major properties (i.e., in Osaka and Yokohama) and one regional property, GGR at ramp up could be in the range of US$7 billion to US$8 billion.” said Sanford Bernstein analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.
They added: “Non-gaming revenue (which in Macau represents less than 10 percent of gross revenues and in Singapore 25 percent) would be a higher percentage in Japan and could be in the US$2 billion to US$3 billion range. Thus, total gross revenues for two metropolitan-city IRs and one regional IR could reach US$9 billion to US$11 billion.”
The brokerage additionally estimated that Japan’s gaming industry could “take some gambling market share” from other gambling destinations in Asia, such as South Korea and Philippines; but the analysts forecast a more limited impact on Macau’s gambling industry.
The authorities in Osaka have mentioned plans for a casino resort there by the time the Osaka World Expo opens in 2025. “This opening deadline seems aggressive at this time,” the brokerage said. Due to the fact that the Japanese national authorities are currently working on the setting up of Japan’s casino administration committee, the body that will be in charge of casino regulation, safety and probity in that newly liberalizing market. The recruitment of the five most senior permanent officials of the casino administration committee will be subject to approval by Japan’s parliament.
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