Macau-based gambling operator Galaxy Entertainment has joined what is expected to be a clash of titans for a license for the nascent Japanese casino market.
The casino giant will compete with the likes of Las Vegas Sands, Melco Resorts & Entertainment, and MGM Resort International for a share of the newly legalized market.
The Japanese Diet approved casino gambling in late December. Lawmakers now have a new important task, one that will set the regulatory framework under which the industry will be regulated. An Implementation Bill is due to be crafted by the end of the year. The new legislative piece will also contain information about the process of selecting the preferred location for two or three integrated resorts in different metropolitan areas.
Galaxy Entertainment is one of six casino operators licensed to provide gambling services in Macau, the Chinese administrative region that has turned into the world’s biggest gambling hub. At present, the company operates the Galaxy Macau destination resort, Broadway Macau, StarWorld Hotel, and several City Clubs.
The company has not revealed how much it is ready to invest in a Japanese casino resort. However, given the fact that fellow casino developers had previously put a $10-billion price tag on a potential development in Japan, Galaxy Entertainment will probably, too, be ready to reach deep into its pockets.
Commenting on their determination to explore the Japanese casino market, Galaxy Entertainment Vice Chairman Francis Lui said that they saw great potential in the Pacific Ocean nation and that they would put a lot of effort together with their partner Societe des Bains de Mer to win a license.
The eventual legalization of casino gambling in Japan was met with overwhelming support by the industry. It is believed that the country holds the potential to repeat the success of Singapore and even Macau.
Two expensive casino resorts were launched in Singapore in 2010, one operated by Las Vegas Sands, the other by Genting Group. The city state turned into the second biggest gambling hub in the Asia-Pacific region within a matter of several years.
It is believed that Japanese lawmakers will adopt a casino regulatory regime that will resemble strongly Singapore’s. According to initial plans, there will be two casino licenses up for grabs, once the country’s market is open for bids.
More moderately disposed analysts believe that two integrated resorts could generate around $5 billion in full-year revenue. Others forecast the creation of a $10-billion market. The most ambitious insiders look forward to a $20-billion-plus market, if more casinos open doors in the country.
In reality, Japan clearly has the potential to attract big-spending casino customers. However, its casino industry will join the Asian-Pacific market at a time when it is undergoing great expansion. Great expansion means great competition and it is yet to be seen whether Japan will be able to enter the competitive field as a tough competitor.
