The building of an “Osaka Strip” involving three or more operators could potentially give Macau and Las Vegas a run for their money, says Steve Gallaway, managing partner of Global Market Advisors.
The analyst made comments on a number of scenarios for IRs in Japan in a white paper titled “White Paper: Japan Integrated Resorts”.
“Japan has the potential to be one of the largest gaming markets in the world, generating up to $24.2 billion at six different locations by 2030,” said Gallaway in the executive summary.
“Developing the Osaka site, with multiple operators on the ‘Osaka Strip,’ would create critical mass and a true tourist destination. This would compete with Las Vegas, Macau, and Singapore in generating nearly $11 billion from that district alone,” he said.
While the number of sites has not officially been determined, it is widely viewed that there will be between one to three IRs in the first round of RFPs, notes the analyst.
One item that is critical to the development of the IR sites however is that the regulatory and RFP structure does not constrain operators.
“As the National Diet continues to evaluate the best structure for integrated resorts in Japan, it needs to consider the strong regulatory atmosphere that should be established,” noted Brendan Bussmann, director of government affairs with Global Market Advisors.
“The Diet needs to balance that regulatory structure with the desire of an operator to build an iconic facility that is representative of a specific site to maximize gaming and non-gaming revenue.”
Responsible gambling is also an important issue that will be considered, says Bo Bernhard, PhD.
“In writing the legislation and creating a responsible gaming structure, the government can benefit from the best evidence-based and research-based solutions that other jurisdictions have implemented worldwide,” he said.
While the first bill authorizing the legislation process for casinos and IRs in the country was passed last year, it is anticipated that the second bill, which writes the legislation governing IRs will be passed at the end of 2017.
The next step will be “an internal process to identify the cities and prefectures that have an interest in hosting IRs” which is estimated to complete by 18Q3.