Japan gambling industry. It is estimated that the demand for equipment, including slots and gaming tables, could range between 15,000 and 25,000 units.
When Japan finally gives gambling licenses to operators who will build their casinos in the territory, slots and equipment manufacturers will get a breath of fresh air for an industry that has been experiencing sluggish growth in recent years.
Japan could become the third largest casino market in the world, when the first casinos open their doors in early 2020. Analysts estimate that revenue per game in the world's third largest economy could reach $ 40 billion Dollars in a few years of operation. (READ SO JAPAN´S GAMBLING WILL OPEN A NEW MARKET)
However, with just a couple of licenses expected to be tendered, few among the major major operators will get a place in this lucrative market. For slot makers and gaming tables, opportunities can be more widespread.
"When we think of equipment suppliers as a whole, it is likely that most manufacturers will have the opportunity to compete and participate in the gaming and systems opportunity for the new casinos in Japan," said John Decree, director Research at Union Gaming Securities. Traders who win the concessions however, will remain the real winners, he said.
Assuming Japan allows for four large casino complexes, demand for slot machines could reach 16,000 units, matching the size of Macau, said Marcus Prater, executive director of the Nevada Gaming Equipment Manufacturers Association. That number would also be equivalent to 20% of annual sales in North America.
"Using a limited (full-scale) resort model, Japan will not need tens of thousands of machines a year, but we welcome any new business to come," Prater said.
Japanese producers of gaming equipment such as Konami Holding Corp. and Sega Sammy Holdings are likely to get a large share of their local market, said Howard Klein, a 30-year veteran of the casino industry who held executive positions at Caesars, Trump Taj Mahal And Ballys. He estimated that demand for Japanese equipment, including slots and gaming tables, could range from 15,000 to 25,000 units. Japanese pachinko machines - or some version of it - could be allowed in new casinos, he said. (READ SO NEW POKER MARKET IN ASIA)
Some opinions of experts express the following statements "The Japanese manufacturers, in my opinion, will be a significant presence in that business," added Klein. "I hope global leaders such as International Game Technology and Scientific Games will team up with Japanese companies to partner or establish branches there."
"Partnerships are certainly a possibility. We do that in many places around the world," said Derik Mooberry, executive director at Scientific Games, adding that the company's Japan strategy will only be clear when the respective legislation is finalized.
"When it comes to Japan, once you know which operators will be licensed, then you will know what relationships you have and what you need to cultivate," said Phil O'Shaughnessy, senior director of global communications at IGT, which formed a Distribution with LG based in Macau to gain better access to the Chinese casino market.
Regardless of which operators win the licenses, foreign gaming companies must adapt some of their current content or create entirely new content to increase sales opportunities in Japan.
"Some content will be unique, aimed specifically at the Japanese and their affinities," Mooberry said. "But there is content that can be globally successful no matter where it is in the world, and you will find your way into casino rooms as well."
