Inside Asian Gaming

MAY 2018 INSIDE ASIAN GAMING 15 Tokyo to comprise 40% of Japan GGR: report Japan’s casino market would be worth around US$15 billion annually, of which Tokyo would account for almost half, under recently agreed regulations between the ruling Liberal Democratic Party (LDP) and its coalition partner Komeito. The US$15 billion figure is an updated estimate by financial services firm Morgan Stanley in the wake of much greater clarity on key issues such as casino size, entry fees and taxation. The LDP and Komeito recently settled on the development of three new integrated resorts upon passing of the IR Implementation Bill, with a flat tax rate of 30%, entry fee for residents of ¥6,000 (US$54) and maximum casino size of 3% of total IR floor space. Taking those measures into account, Morgan Stanley estimates Japan GGR of US$15 billion by 2025 and EBITDA per city in the range of US$1 billion to US$2 billion assuming an IR investment of no more than US$10 billion. Morgan Stanley analysts also predict that Tokyo would provide the greatest return should it be awarded one of Japan’s IR licenses, including 50% of foreign spend and 40% of the total. “Based on foreign visitation numbers in each city, we estimate roughly 50% of US$3.9 billion foreign GGR goes to Tokyo, 30% to Osaka and 10% to the third city,” it said. “Based on the income level/GDP, infrastructure development and tourism Umansky, Zhen Gong and Cathy Huang. “Galaxy has had an office in Tokyo for over three years and has been actively involved in discussions surrounding legalization of casinos in Japan. While Mike Mecca has been leading the effort on international development opportunities, including Japan, the time was ripe to put a seasoned, well-experienced executive on the ground to heighten the effort as legalization moves potentially closer to fruition.” Chan’s appointment coincides with Mecca’s nomination to the GEG board. Mecca will step down as GEG’s President of International Development – a position he has held for three years – to join the board. He will remain a director of Monte-Carlo SBM and also joins the Japan development committee. attraction, we would expect Tokyo to take around 40% of the total US$15 billion GGR at US$6 billion market size and Osaka’s market size to be slightly smaller at US$4 billion.” However, analysts note that while Osaka seems to be a lock for one of the licenses, Tokyo is no guarantee given it “seems to be busy with the [2020] Olympics.”