Melco Would Put Esports Stadium Front and Center of Japanese Integrated Resort

Posted on: October 16, 2018, 07:13h. 

Last updated on: October 16, 2018, 07:13h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Melco’s International’s bid to win a Japanese hearts, Japanese minds, and a Japanese casino license will involve the integration of an esports stadium into a future casino resort in the country.

Melco
Melco’s Macau EStadium at its Studio City property on the Cotai Strip opened in July and is the first dedicated esports arena in the Chinese gambling hub. (Image: Melco)

Japan has passed legislation to legalize and regulate casino gaming, opening up a market that promises to be the second biggest in the world after Macau — and international operators are salivating at the prospect.

Speaking to the Nikkei Asian Review in Kyoto this week, Melco’s Chief Financial Officer Geoffrey Davis said an esports stadium is likely to be a “key component” for the Macau-based company’s plan for Japan.

In July, Melco opened the first esports arena in Macau — the 274-seat Macau EStadium at its Studio City property on the Cotai Strip.

Currently, a similar venture in Japan would also be a first — although it’s likely Melco will be beaten to the punch. Prospective operators have only just begun the process of submitting tentative proposals to potential host cities and the first casino resorts aren’t likely to be up and running until at least 2024.

Esports in Japan a Slow Burner

Meanwhile, esports in Japan recently received boost that promises to kickstart an explosion in the market. Despite being a major producer and consumer of video games, Japan has been surprisingly slow to embrace esports. This was largely due to consumer regulations that placed restrictions on prize pools.

But as esports grew across Asia, a group of Japanese lawmakers pushed for change, spurred by the acceptance of competitive video gaming as full medal event at the Asian Games in Indonesia in 2022. In February, thanks to the change in regulations, Japan was able to hold its first esports tournament with a prize pool big enough to attract international players.

Operators believe it’s crucial to convince the Japanese populace that integrated resorts are not purely about gambling but also offer a wide range of inclusive entertainment. Polls consistently suggest that the public has a negative view of integrated resorts because they understand them purely as casinos, which they feel will bring social problems.

Premium Mass Producer

But Melco Esports arena — and the Japanese IR project in general — isn’t just about pleasing the domestic crowd. Japan’s legalization of casinos is about economic growth and increased tourism, the vast majority of which is expected to come from China, a country that makes up 64 percent of the 390 million esports players worldwide, according to a report by Tencent Holdings.

The stadium is consistent with Melco’s policy of targeting the “premium mass” segment from mainland China — a wealthy, globetrotting demographic that travels independently to casino resorts rather than through the junkets reserved for VIP high-rollers.

These are big spenders at the baccarat tables, but they are also interested in experiencing and discovering new culture and entertainment.

Entertainment will be doubly important in Japan’s future integrated resorts because casino gaming will only account for three percent of their total area, by law.