Inside Asian Gaming

July 2013 | INSIDE ASIAN GAMING 23 The Fuji Television Building in the waterfront area of Tokyo’s Minato district 3000 2500 2000 1500 Aug Sep Oct Nov Dec 2013 Feb Mar Apr May Jun Jul Sega Sammy Holdings Stock Price ¥ 250K 200K 150K Aug Sep Oct Nov Dec 2013 Feb Mar Apr May Jun Jul Fuji Holdings Stock Price ¥ 3000 2500 2000 Aug Sep Oct Nov Dec 2013 Feb Mar Apr May Jun Jul Konami Stock Price ¥ IN FOCUS Japanese visitors and is likely to suffer the largest cannibalization following the opening of Japan’s IRs. As for which global casino operators might participate in casino development in Japan, analysts point to the usual suspects, including Las Vegas Sands, Genting Group and Caesars Entertainment. Domestically, if the stock market’s wisdom is anything to go by, the front-runners appear to be Sega Sammy Holdings—which is developing an IR in South Korea in partnership with that country’s Paradise Group—and Fuji Media Holdings, a broadcaster located in a section of Tokyo considered prime territory for casino development. Sega Sammy stated a desire as far back as 2007 to invest in casinos in Japan should the opportunity arise and last February purchased a resort in Miyazaki Prefecture. Two months after that acquisition was announced, company President Hajime Satomi reasserted the company’s intentions, saying, “Of course, [a casino] is what we have in mind.” Another potential beneficiary of casino legalization in Japan is Konami Corp. and its slot-manufacturing subsidiaries. Given the local population’s affinity for pachinko, Japan’s casinos are expected to contain a high concentration of gaming machines. potential impediments to getting casino gaming off the ground, including the political instability created by frequent changes in leadership and opposition from political and citizens’groups worried it will give rise to problem gambling and other social ills. Also clouding the outlook is regulatory risk—both over-regulation of the industry and measures to keep locals out of casinos. Then there’s the old chestnut of Japan’s aging/declining population, and the fact that a long history of strained relations between China and Japan could keep away Chinese visitors. Japan’s first casinos will be housed within two Singapore-style IRs featuring leisure and entertainment and MICE facilities as well as gaming, says Morgan Stanley. In their report, Mr Choudhary and Ms Nagasaka offer four approaches to estimating the size of the country’s gaming market, including: revenue to GDP; percentage of pachinko; table efficiency; and population/visitation/HNWIs. The resulting market estimate is US$8-11 billion. The eventual opening of casinos in Japan is not expected to have much of an impact on Macau, where the bulk of visitors hail from neighbouring Guangdong province in China and Japanese visitors do not feature prominently in the mix. Of Asia’s major gaming destinations, South Korea receives by far the largest number of