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Commencement of Construction of a New Integrated Casino Resort (IR) in Japan: Prospects and Realities

Commencement of Construction of a New Integrated Casino Resort (IR) in Japan: Prospects and Realities

1. Trivia Note

2. Gambling Market Sentiment

3. Where Will Casino Resorts be Located?

4. Some Information on the Investors

5. Conclusion

Integrated casinos in Japan have become the main theme in the last few months. Another level of popularity was provided by the news that, in December, the government will name three zones for IR. In several years, huge gambling resorts will appear, and they will attract millions of tourists every year.

Integrated casino resort in Japan

Trivia Note

For a long time, the Japanese gambling industry was under the ban. The reasons for it were historical prejudices and the fear of the government that the crime figure and the number of people with ludomania will increase.

Regulators have started talking about the legalisation of the gambling business, including land-based casinos, at the beginning of 00s, and after 2013, this talk was resumed. The approved request of Tokyo for hosting the Summer Olympics in 2020 had a great impact on it.

The law on the integrated casino resorts was adopted by the House of Councillors only in July 2018. According to this document, the country is going to build three casino resorts (IR) and all the related infrastructure.

It means that three large cities will be built, which will create thousands of jobs opportunities and provide the owners of gambling establishments with a decent profit.

Gambling Market Sentiment

Experts in the gambling field take a favourable view of the government’s actions. Several reputable analytical centres have published their forecasts regarding the expected income from the casino sphere.

Prognosis of Annual Gross Income (GGR) From IR for 2025

Who conducted a survey

GGR, in billion dollars

Fitch Ratings

10,0

MGM

7,0

Morgan Stanley

8,5

Thus, the opening of casinos in Japan will help the government to generate 7 billion dollars, and it is according to the most pessimistic forecasts. In fact, analysts believe that the profit will be even higher.

The overall profitability in the gambling sector will also increase. The same Fitch Ratings says that in 2025, the figure will reach 20 billion dollars but, in this case, the online business is also taken into account.

Casinos in Japan are considered profitable for several more reasons:

  1. The increase in the number of tourists. The main goal of the authorities is to attract up to 60 million tourists to the country annually. Right now, this figure is around 20 million people but everything will change in 2020, during the Olympic Games. The Department of Tourism of Japan is actively standing for this.
  2. Anti-money laundering. IR activities will be clearly and strictly regulated. The law, for example, prescribes several circumstances of decertification, and there is also a multi-level system of fines for violations.
  3. New treasury revenues. The law sets taxation of 30% for casino resorts. Thanks to this, the country's treasury will receive about 2.5-3 billion dollars per year additionally. Taxes will be divided equally between the local municipality and the central department.
  4. Investments. Several global operators are ready to invest in IR. The authorities also hope for large investments in infrastructure projects that will serve visitors to casinos.
  5. The fight against ludomania. The new gambling project in Japan contains several sections that are focused on the fight against ludomania. For example, if residents of Japan want to enter the casino, they will need to pay for it. Also, there will be a limited number of visits over a particular period of time (one week or ten days). These aspects will be tracked with the use of personal ID cards. In general, the concentration of casino games in several resorts will save the money of Japanese. Today, they are wasting money in international offshore online gambling establishments outside the country.

Where Will Casino Resorts be Located?

Gambling industry in Japan

The government confirmed that as on September 2019, eight regions are interested in building IR on their territory.

The list of applicants includes:

  • capital of the country, Tokyo;
  • large agglomerations of Yokohama, Osaka, Hokkaido;
  • Nagoya and Chiba;
  • Nagasaki and Wakayama prefectures.

Moreover, the authorities are planning to study all the applications in detail, hold interviews with public officials, and, by the end of the year, finally, decide on the receiving party. The choice of the region will be made on the basis of the tender, and only three administrative territories will receive the construction permit.

So far, Tokyo, Osaka, and Yokohama are the most likely candidates for winning. Experts believe that these popular tourist destinations can generate the greatest profit at the earliest possible date.

Some Information on the Investors

The desire to invest in IR has already been expressed by several major international companies. Among them, there is the Hong Kong consortium Melco Crown Entertainment, the American brands MGM Resorts and Las Vegas Sands.

Potential investors are now waiting for a decision on the spatial location of casino resorts. The casino gambling area also remains an important aspect. The indicator is 3% of the total resort area, and, according to many businessmen, is not enough. It is still unclear whether passages between sectors, catering facilities, and operating space will be included in the gambling area.

Conclusion

Japanese casino resorts are a promising area for investment. Experts are sure that in just a few years, this Asian market will be able to compete with such industry giants as Macau, Las Vegas, and Singapore. Moreover, the region is available for both large corporations and small and medium enterprises.

Gaminator will help you to open your own business — in Japan, Russia or any other country. We have been working in the international gambling industry for many years, and we know the legislative framework of many countries. That is why we can provide our customers with a decent profit.

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