IRs in Japan to generate billions in GGR

Fitch Ratings said that integrated resorts in Japan are likely to generate between €4.5 and €8 billion.

Japan.- Depending on the location of the upcoming integrated resorts (IR) in Japan, the facilities could generate between €4.5 billion and €8 billion in gaming revenue every year. This is according to Fitch Ratings, which believes that the three IRs can generate successful numbers.

The rating agency said in its All In: Global Gaming Handbook that it projects Japan’s large-scale IRs in major metro areas to generate approximately €2.5 billion of gaming revenue each. Fitch Rating’s estimations for more remote locations are approximately €1.1 billion in gaming gross revenue (GGR).

“We would view a company winning a license in a major metro area favourably in terms of increased diversification and having a sizable asset in a market with solid supply/demand dynamics and a robust regulatory framework,” it said. “However, the project will be expensive, placing pressure on the winning bidders’ credit metrics and liquidity through the long development cycle,” added Fitch Ratings.

Last month, Cabinet approved standards for casino resorts, which require them to be built with big-scale hotels, far larger than currently exist in the country. Conference rooms and exhibition halls are also requirements for the integrated resorts (IR).

The facilities will feature hotels, conference rooms and shopping facilities. While the average-sized Japanese guest room features 50 square meters, a hotel with a casino would necessitate 2,000 rooms, exceeding the average 1,500 at three big Tokyo hotels.

In regards to conference rooms and exhibition sites, operators would need to meet one of three combined criteria. These include a convention centre that accommodates 3,000 people with a 60,000 square meter exhibition space. The maximum casino floor space should be 3% of the total space for the integrated resort.