No Integrated Resorts in Japan Before 2026: Analysts
Posted on: June 7, 2019, 04:11h.
Last updated on: June 7, 2019, 04:11h.
The first Japanese casino resorts are unlikely to open their doors until 2026. That’s the conclusion of a research brief published this week by Global Market Advisors (GMA), which asserts that legislative delays and construction challenges will put paid to the ambitions of those prospective host cities gambling on a 2024 launch.
Foremost among these is Osaka, which is the current frontrunner to win one of three licenses that will eventually be made available by the Japanese government. Osaka won the bid to stage the World Expo in 2025, an event it believes will attract 28 million visitors to the city, generating an estimated $17.6 billion for the local economy.
The city – Japan’s third largest – is desperate to capitalize on the crowds by having the first integrated resort up and running a year earlier, on Yumeshima, an artificial island in Osaka Bay, which will also host the World Expo.
Osaka Suitors Announced
Osaka is being aggressively courted by international casino developers, eager to secure themselves a sizeable chunk of a new gaming market that has the potential to become the second-biggest in the world, after Macau, within a few years of its launch.
This week, Osaka officials named five of the seven operators that are participating in city’s request-for-concept (RFC) phase that began in late April. These are MGM Resorts, Genting, LVS, Melco Resorts, and Wynn Resorts. Two others requested not to be identified, although the two likeliest candidates would be Galaxy Entertainment and Caesars Entertainment, both of which have previously expressed an interest.
MGM Resorts has committed to Osaka alone, a risky all-or-nothing gambit that will likely impress city officials, but risks missing out on the market entirely.
Speaking to the Nikkei Asian Review last month, MGM CEO Jim Murren described a 2024 opening as “incredibly tough but not impossible.” GMA disagrees, believing that the construction on Yumeshima, a reclaimed landfill site, could be particularly difficult.
“Even under the most aggressive timeline, it would have been a challenge to get an IR open on Yumeshima by 2025, should they be awarded one of the three coveted licenses,” GMA said. “This is because of the challenges that would face any structure of this magnitude being built anywhere in Japan, let alone a man-made island that may have its own challenges in construction.”
Politics Stall Japanese Casino Market
The Japanese government recently delayed plans to establish a regulatory body to oversee its impending casino industry — as well as a definitive framework of regulations — until after summer elections, fearing the enactment of gaming-related policies could hurt it at the ballot box. The regulatory body was due to be established by July 1, but casinos remain unpopular among two-thirds of the electorate and the government fears a backlash.
But GMA believes that establishment of Japan’s Casino Management Commission and the publication of the rules will happen before 2020, rather being belayed by up to 12 months as some of the more pessimistic projections suggested.
“The timeline could advance to a faster IR opening should the operator/prefecture partnership take the risk upon themselves to advance an IR opening earlier than 2026,” wrote GMA analysts.
“If there is not a process in place by 2Q20, it is unlikely that a full integrated resort would be open in time to meet the desires of Osaka for the World Expo in 2025, or anyone else that will be investing billions of dollars into an integrated resort,” they added.
Related News Articles
Related News Articles
October 25, 2021 — 5 Comments—
November 20, 2021 — 4 Comments—
October 31, 2021 — 3 Comments—