Insight JAPAN Japan Gaming Congress
allures as gaming markets and as quoted by public broadcaster TDM – ‘the majority of visitors to Macau’s casino resorts are from the south and central parts of Mainland China… potential Chinese visitors going to gamble in any casino resort in Japan would more likely be from mainland China’s northern areas’.
Further research also suggests that Japan is expected to be more of a locals market than an inbound VIP market so the impact to Macau will probably be minimal over the long term, although we would expect some short term hiccups in the first year or two after the IRs open in Japan as VIP customers will want to see the new facilities.
Even Japan’s Dr. Toru Mihara, Director of the Center for Amusement Industry Studies at the Osaka University of Commerce seems to agree that Japan will never be a threat to Macau because of the gaming mix.
Japan is a totally different market, where healthy premium mass and mass [market] are abundant. Approximately 80 per cent of patrons shall be Japanese. When considering these factors it’s probably fair to say that Macau doesn’t have too much to worry about in regards to newly regulated Japan.
Another thriving Asian gaming region is Singapore. Perhaps they may have slightly more cause for concern? Singapore has the second biggest gaming economy in Asia with annual revenues of up to $7bn (2015). All of its income comes from two main resorts, the Las Vegas Sands owned Marina Bay Sands and Genting Singapore’s Resorts World Sentosa. Again, a significant chunk of revenue is generated from tourists coming in from neighbouring regions such as Indonesia, Malaysia and China. However, unlike Macau, the middlemen who bring in VIPs are not allowed to lend money to gamblers in Singapore, this leaves the casinos directly exposed to the risk of lending to its customers.
Te VIP gamblers that travel in from Mainland China generate a large portion of Macau’s gaming revenue. Tis could be cause for concern as these could potentially be the same Mainland VIPs that Japanese IRs will target, causing heightened competition for Macau.
Industry analysts believe that mainland travellers could be lured away from Macau for a holiday. Especially as Japan has significantly more traditional and rural attractions that could potentially make for a more appealing destination to Chinese travellers.
It is still, however, tricky to estimate the impact of Japan before the number of casino licenses to be awarded has been confirmed. If Japan decides to develop its gaming sector on a large scale, other Asian regions such as Singapore
and Macau will experience the significant effects of heightened competition without a doubt.
A key point to bear in mind is that the first casinos are not expected to become operational until at least 2022, so other Asian markets will not feel any effects in the short term. However, in the long run, this bill is likely to help Japan to compete as a new gambling tourism destination in Asia. Japan is the third largest economy in the world and has an adult population that is open to the practice of gambling.
Although the touristic appeal of Japan is undeniable, Wilfred Wong Ying Wai, President and Chief Operating Officer of Macau-based casino operator Sands China has commented that Macau and Japan would have different
Money that Genting Singapore is owed, but hasn’t collected totalled $787.5m in 2014, more than double the $369m in 2010. Approximately four times the average at Macau’s six biggest casino operators, according to a Bloomberg report.
Tis means Singapore casinos miss out on the mainland connections that these junket operators are known for in the gaming industry. Singapore has only three licensed junket operators compared around 200 in Macau. Resulting in a smaller and shrinking pool of gamblers for Singapore casinos.
Paul Bromberg, CEO of Spectrum Asia recently commented that junkets exist because they ‘Fill a void’ and during his talks with Japanese officials, they have clearly shown an interest in the role of junkets. If Japan does go ahead with the junket system, as many are expecting, then
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