A note from banking group Morgan Stanley suggests the Japanese authorities appear to have ruled out the possibility of allowing a cluster of casino resorts similar to those found on the Las Vegas Strip, in Nevada’s gambling hub in the United States, or on the Cotai Strip in Macau.
“It appears that only one casino can be built in one city, which was our understanding previously too, but would make the process more competitive,” said the note from analysts Praveen Choudhary, Alex Poon and Thomas Allen. They cite as the source for this guidance Japan’s Office of Integrated Resort Regime Promotion – also known as the IR Promotion Secretariat – a team of civil servants advising the country’s government on implementation of the casino legalisation policy.
An April white paper issued by business consultancy Global Market Advisors LLC (GMA) had suggested that – by way of illustration – an “Osaka Strip” concept should be considered, for a world-class casino gaming hub in Japan with multiple venues, to compete with the likes of Las Vegas and Macau.
GMA said in the white paper executive summary that Clairvest Group Inc, a Toronto, Canada-based private-equity management firm; and U.S.-based casino operator Hard Rock International Inc, had sponsored the discussion document that mentioned the idea of Osaka (pictured) hosting a casino strip.
In other commentary on the latest information to emerge from the IR Promotion Secretariat, Morgan Stanley suggested that were Japan to bar “Macau-style” junkets in its casino industry, it would in likelihood mean “either much smaller VIP business, or very high debt provisions” for the casino operators.
In the Macau market, the role of the VIP gaming promoters – or junket operators – in arranging for the issue of player credit to fund high roller play and arranging for the collection of debt on any player losses, is widely regarded by investment analysts as a factor helping to reduce casino operators’ exposure to bad debt in that segment.
The Morgan Stanley team also noted: “It appears difficult for the gambling addiction bill to be passed in this Diet [parliament] session by June 18.” That was a reference to a piece of harm mitigation legislation widely reported to be a precursor to the IR [Integrated Resorts] Implementation Bill.
“This could push the IR Implementation Bill to Diet sessions in 2018,” added the financial institution.
Japan’s governing Liberal Democratic Party and its minority partner Komeito on Tuesday submitted to the country’s parliament an anti-gambling addiction bill. But the bill is not likely to be passed by lawmakers until the autumn at the earliest, according to GGRAsia’s Japan correspondent.
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"We made that decision… to move away at this point in time from a permanent resident show, to a… variety of shows"
Chief executive of Macau casino operator MGM China