Inside Asian Gaming

INSIDE ASIAN GAMING | March 2012 4 Cover Story A Japan casino market based on two resorts similar to Singapore’s could “comfortably exceed” US$10 billion per year in gaming revenue, says a report from CLSA Asia-Pacific Markets in conjunction with Credit Agricole Securities (USA). Furthermore, CLSA/Credit Agricole Securities (USA) says its own survey of 600 respondents in the country found only 20% actively opposed to casino resorts in Japan, while more than 50% indicated they would be willing to visit one. The data come from a 40-page report named ‘Asia’s wonderland—Integrated resorts bring the magic to Japan’. The ‘wonderland’ part of the title is carefully chosen. The authors point out that not only does Japan already have some of the highest gaming spending in the world— with the annual equivalent of US$25 billion revenue from the uniquely Japanese arcade game pachinko, on sales turnover of US$250 billion per year—but it also has some of the highest visitor attendances for theme parks anywhere in the world and some of the highest ancillary spending rates by those visitors. In other words, domestic visitors and overseas tourists don’t skimp when they take time off in Japan. Combine the domestic passions of the Japanese—to be thrilled by arcade games and park rides and shopping—then throw into the mix a surge of interest from overseas visitors if casinos were added to the offer, and Japan could potentially have one of the biggest and most dynamic casino resort industries in the world, suggests CLSA/Credit Agricole Securities (USA). “In light of Macau and Singapore’s success, we believe the Japanese market offers huge potential to become the biggest IR nation globally,” says the paper resorts] are approved in Tokyo and Osaka with a similar industry framework as that of Singapore, gaming revenue could comfortably exceed US$10bn, especially considering that two IRs in Singapore generate about US$6bn in revenue on a population of just 5 million compared to Japan’s 128 million,” suggests the report. “The Japanese also show high interest in gaming, as evidenced by the current size of the pachinko market. There are 12,652 pachinko/pachislot halls with 4.6 million installed pachinko/pachislot machines, generating an estimated gaming revenue of around US$25 billion (assuming amounts wagered are US$250 billion at a return rate of 10%, of which 5% is the machine take and 5% is on conversion),” add the report authors. “Given the number of favourable Japan, US, Macau and Singapore gaming revenue and gaming spend per capita, 2011 jointly written by Jon Oh and Clifford Kurz of Credit Agricole Securities (USA) in New York, and Aaron Fischer, CLSA’s Head of Gaming Research based in Hong Kong. “Assuming two large scale IRs [integrated