Well, Telsey Advisory Group’s Senior Gaming & Lodging Analyst Chris Jones recently made a more concrete estimate in a 44-page analysis of Japan’s casino potential. In his analysis, Jones estimated that the country that’s already being ordained as the second largest casino market in the world could stand to earn as much as $23.8 billion a year. That’s a high ceiling estimate that assumes that casino revenue in the country translates to 0.4 percent of the country’s GDP, which is what the rough percentage of what casinos earn in the US relative to its own GDP figures.
A far more conservative, if not more likely estimate would be about $16.5 billion a year with the brunt of the earnings coming from Tokyo, which Jones believes can support two casinos. Supposing that an $8 billion casino is built in Tokyo and another smaller one is built somewhere across Tokyo Bay, those two establishments could potentially earn as much as $10 billion in revenue a year between themselves.
Meanwhile, a $6 billion casino project in Osaka could earn as much as $3.8 billion a year. Outside of the country’s two mega cities, Hokkaido and Kyushu have been pegged as receiving large regional casinos, which if both happens, could return as much as $1.8 billion in revenue a year for ear of the two casino joints.
All signs do seem to point to Japan flexing its casino potential until all its veins come popping out, but such extravagant estimates also leads to the importance of tempered expectations.
The market is expected to be all that it’s supposed to be, but Jones also believes that there will be some concerning impediments that could hamper the market’s full potential.
One is the slow progress the country has had in meeting the government’s tourist number goals. Japan has set a target of 18 million visitors in 2016 and 25 million in 2020, but it has yet to accomplish its more short-term goal of attracting 10 million visitors a year. Even the allure of hosting the 2020 Olympics won’t be enough to tilt those numbers in the long term. More needs to be done to increase those numbers, at least more than just opening the market to casinos.
Jones also pointed how the country’s casino market could have a domino effect on other jurisdictions. The analyst made a point of highlighting South Korea, which could lose its as much as one-third of its casino business to Japan, forcing the country to adopt a more relaxed policy of allowing its own citizens to play in their casinos. With the country becoming more and more aggressive in welcoming foreign casinos, that scenario poses a distinct possibility.
All that being said, there’s still plenty to get excited about if you’re a casino operator that’s interested in having a presence in Japan. Once legislation is approved to clear the way for these operators to make applications as expected, there won’t be any shortage of applicants wanting a piece of this delicious Japanese pie.
source :www.calvinayre.com
