Japan IRs to generate €8bn to €10bn in revenues
Bernstein Research has estimated that the three integrated resorts (IRs) in Japan are likely to generate between €8 billion and €10 billion in revenue.
Japan.- The casino industry in Japan is one of the most anticipated in the world. This isn’t only because of its recent legalisation but also because of the potential revenue that it could generate. Bernstein Research said in an August note that combined annual revenues for the first three integrated resorts (IRs) are likely to be between €8 billion and €10 billion.
With that range estimated by Bernstein, gross gaming revenue (GGR) would eventually be between €6.2 billion to €7.1 billion annually. However, “if only one metropolitan area is selected with two regional IRs, the revenue would be lower,” said the brokerage.
Analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu also talked about non-gaming revenue. “Non-gaming revenue – which in Macau represents less than 10% of gross revenues and in Singapore 25% – would be a higher percentage in Japan and could be in the €1.7 billion to €2.6 billion range. Thus, total gross revenues for two metropolitan-city IRs and one regional IR could reach €8 billion and €10 billion.”
Casinos, not likely to happen before 2025
Moreover, they said that realistically, the first IR in Japan is not likely to open before 2025. “The process of setting up regulations and guidelines has continued to be slow-moving, and the bidding process [for the first IRs] will likely take another 12 to 18 months,” Sanford Bernstein said. “The development process after Japan announces the bids could take another five years.”
Regarding the location of the facilities, they said that three major metropolitan areas of Osaka and Yokohama are front-runners. Nagasaki and Hokkaido lead as potential host cities for regional integrated resorts, they said. “Las Vegas Sands and MGM Resorts are in more advanced stages of preparation work and are among the top contenders. Melco, Wynn, Galaxy, and Genting Singapore have also been very active.”
