‘Japan’s casino market could be worth at least $20 billion‘ is a line that has been broadly repeated in media since Japanese lawmakers legalized the construction of up to two integrated casino resorts within the country’s borders in mid-December and even prior to that.
That preliminary forecast was made by brokerage and investment firm CLSA Ltd. and has been used by many as a good illustration of the potential Japan may be holding when its casino properties open doors, probably sometime in the early 2020s.
Earlier this week, Alex Bumazhny, a Fitch Ratings senior gaming analyst, gave a more modest prognosis about the size of the country’s casino market. According to the expert, two integrated resorts could generate annual revenue of between $5-$10 billion.
Mr. Bumazhny said he believes Japanese lawmakers would impose certain limitations on Japanese casino players to address growing concerns over the effect the two casino complexes would have on society.
It was in January when reports emerged from the country that the government had been urged to introduce regulations that would promote responsible gambling and would protect Japan’s population from gambling-related health conditions that may arise from the increased gaming offering.
The Fitch Ratings expert pointed out that lawmakers might mimic Singapore when drafting Japan’s casino regulatory framework. The island city-state regulated its casino industry more than a decade ago, with its two integrated resorts opening in the early 2010s. Singapore residents have been allowed to play at local casinos but only after paying a certain entry fee. What is more, individuals can be banned from the venues for irresponsible gambling at their own or their relatives’ request.
Mr. Bumazhny also presented a not-very-likely but yet possible scenario in which we could see Japanese casinos being restricted to foreigners only.
The analyst noted that with two large integrated resorts and certain limitations imposed, Japan would not be able to catch up with Macau, which is forecast to generate gambling revenue of around $25 billion in 2017. However, the country would still be in an excellent position to compete with Las Vegas and Singapore, the world’s second and third largest casino gambling hubs, respectively, for a bigger share of the global casino market.
Japanese lawmakers now have up until the end of the year to draft and approve a new bill that would set the laws under which the country’s casino industry would be regulated. The legislative piece would also contain information about the two resorts’ preferred locations.
