Japan’s Gaming Prospects Heat Up

For years now, many have eagerly speculated that Japan will pass legislation allowing casinos to be opened within the nation. This year, more than in previous years, it looks like Japan may pass such legislation. With things heating up in the Asian gaming market, e.g., in South Korea and The Philippines, and with the 2020 Summer Olympics in Tokyo creeping up, there seems to be more than a hint of urgency to green-light casino development in Japan.

Despite having several forms of legal gaming, such as pachinko, lottery, and race betting, Vegas-style games are not currently permitted in Japan. The opposition to casinos in Japan has cited problem gambling and opportunities for increased organized crime activity as concerns. However, promises of multi-billion dollar foreign investments and the allure of a mechanism for economic recovery may outweigh those concerns this time around. Prime Minister Shinzo Abe has voiced his support for legalizing casinos as a potential means by which to revive the economy, forming part of his “Abenomics” strategy.

This summer, unless snagged by procedural issues, Parliament is expected to pass legislation  for four casino resort licenses. Diet member Takeshi Iwaya of the Liberal Democratic Party leads the push for resort gaming in Japan and has multi-party support. At least one casino is expected for Tokyo, and another in Osaka. We believe that Japan could become one of the most lucrative gaming markets in the world (behind Macau). With the passage of this legislation, Japan will likely become the stage for one of the fiercest battles for casino licenses the world has ever witnessed.


Contributed by:

Anthony Mumphrey, III, Principal
anthony@tmg-consulting.net or 504.569.9239 x 22

and

Nicholas Farrae
Senior Analyst, Economics & Gaming
nicholasfarrae@tmg-consulting.net or 504.569.9239 x 31

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 Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

The Outlook for Asian Gaming

Attention has been given to the rise of Asia’s booming gaming market in recent years, with some analysts even projecting it to surpass all other regional gaming markets before the decade’s end.  The success of Macau and Singapore has inspired other parts of Asia to either enhance their existing gaming industry to a world-class standard or to establish their own destination gaming markets.

The Philippines and Vietnam, both countries with existing gaming facilities, have passed legislation to support a destination resort casino market.  South Korea may follow their lead.  In other parts of Asia without Las Vegas-style games, such as Japan and Taiwan, things have been heating up with legislators and other constituents seriously considering gaming’s benefits.

Asia’s gaming fever mirrors that of the United States.  In recent years, several states in the U.S. implemented gaming legislation or expanded existing games.  Some U.S. gaming markets could even be described as saturated.  In the Mid-Atlantic region for example, gaming facilities in Delaware, Pennsylvania, New Jersey, New York, West Virginia and Maryland are in heavy competition for the same regional patrons and tourists.  Delaware and Pennsylvania added table games to their facilities, at least partially pressured by a congesting regional market.

The key difference between the pervasion of gaming throughout Asia and the United States is demand.  According to Credit-Suisse’s Global Wealth Report 2011 there are about 949.7 million people living throughout North, Central, and South America.  Throughout the entire Asia-Pacific region (includes China and India) there about 4.25 billion people.  The population of the Americas is not even a quarter of the population of the Asia-Pacific region.  Trying to imagine how much gaming product it would take to saturate the Asia-Pacific region is staggering.

A huge driver behind the success of Macau and Singapore’s gaming markets has been Chinese tourism.  Chinese policy changes opened up its outbound tourism market and greatly increased the proportion of Chinese visitors to all visitors in several regional markets.  Singapore for example, drew about 5.6% of its total visitors in 2000 from China.  In 2010, Chinese visitors to Singapore represented about 10.3% of all visitors to the country.

Asian gaming markets have another thing going their way—Asia is becoming wealthier.  Based on projections made by Credit-Suisse and detailed in their World Wealth Report 2011, wealth in the Asia-Pacific region (including China and India) is increasing at a greater rate than the world’s two wealthiest regions (Northern America and Europe) and the world’s average.  As the average wealth of individuals increases throughout the Asia-Pacific region, more and more people will have the means to indulge in leisure activities and travel—increasing regional demand for destination resort casinos.

With such trends in wealth, tourism, and population it is little wonder that destination gaming has been such a success in Asia in recent times.  It is also no surprise that many other Asian countries want in on the action, and that they are not trying to follow the ‘Las Vegas Model,’ but either the ‘Singapore’ or ‘Macau Model.’

Contributed by:

Nicholas Farrae

Analyst, Economics and Gaming

nicholasfarrae@tmg-consulting.net  or (504) 569-9239 x 31

Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.