Up to four integrated resorts could open doors in Japan, research firm Morningstar Inc. wrote in a note, cited by casino news outlet GGRAsia. Morningstar’s note was based on discussions with industry insiders and Japanese lawmakers that are currently taking part in the process of crafting the Integrated Resorts Implementation Bill.
The research firm believes that two integrated resorts in two major cities and two such venues in regional locations could represent a $25-billion-worth market. According to Morningstar the properties can generate around $19 billion in gaming revenue and $6 billion from non-gambling options. The market will be able to reach this scale and size only if there are no serious limitations posed by lawmakers.
Members of the Japanese government are currently working on the second stage of a casino legislative process that if successful, may create Asia’s and the world’s next major gambling hub. It was last December when the Diet approved a bill that provided for the legalization of casino gambling within the country’s borders.
The move laid the foundations for the establishment of the industry, but the second bill, the one lawmakers are currently working on, will set the regulations, under which that industry will be managed.
Taxation will certainly be one of the main points discussed by the specially assigned task force that is responsible for crafting the second casino bill. According to Morningstar, Japan’s casino taxation system may be based on Singapore’s. The island city-state legalized casino gambling in mid-2000s and saw its two integrated resorts open doors in 2010. It taxes the two casinos at 15% on mass market play and 5% on VIP play.
Operators of Singapore’s integrated resorts must also pay a 7% tax on Goods and Services. In comparison, Macau charges its casinos at a 39% rate on gross gambling revenue.
Speaking of Macau, Morningstar said that Japan may pose certain threat to its casino market. The research firm believes that Japan’s integrated resort will attract customers from South Korea and China’s northern coastal part. However, Macau will still have advantage as it is a preferred destination for Mainland China’s middle-income class, which is growing rapidly. Following Chinese President Xi Jinping’s crackdown on corruption and gambling, Macau averted its focus to the mass market segment and non-gambling offering, which, as figures from the past ten months have shown, has proved to be a positive move.
It became clear last week that Japanese lawmakers are likely to reveal details about their progress on the Integrated Resorts Implementation Bill in August. The legislative piece is hoped to be passed into law by the end of the year.
