Dynam ‘strong’ candidate for casino in Japan: analyst
Japanese pachinko hall management company Dynam Japan Holdings Ltd is a top candidate for a casino licence in Japan if casinos are legalised in the country, says equity research firm Advanced Research Japan Co Ltd.
The company has a “close relationship” with Macau-based casino services firm Macau Legend Development Ltd, in which it has an investment stake, analyst Daigo Fukunaga noted in a report issued on July 8. “This is a powerful advantage over other candidate operators, and we believe there is a strong likelihood the company will be granted a licence,” he said.
Mr Fukugana however cautioned: “There are still many variable elements in flux at present.”
Macau Legend, controlled by businessman David Chow Kam Fai, operates the Babylon Casino and the Pharaoh’s Palace Casino at Landmark Macau hotel under a SJM Holdings Ltd licence. The company is building three new hotels and more entertainment venues at its Macau Fisherman’s Wharf site, a waterside location on Macau peninsula. The revamp, which includes two new casinos, will cost about HK$6 billion (US$774 million), the firm has said.
Dynam and Macau Legend, both listed on the Hong Kong stock exchange, signed a memorandum of understanding last year for the Japanese company to install in Macau “next-generation pachinko machines”. These consist of a video game monitor, and unlike most standard Japanese pachinko machines have no actual balls or pins. The games will be targeted at the mass market.
Mr Fukunaga said in the Advanced Research report that it is very likely that casinos will be made legal in Japan. “As the Abe administration has positioned tourism as one important growth strategy, it is likely unnecessary to be concerned that the proposed casino law will not be passed,” he wrote, referring to the stance of Japan’s Prime Minister Shinzo Abe.
The analyst added that the consensus view regarding enactment of the law is that it would in likelihood happen at what’s known as the extraordinary session of Japan’s parliament in the autumn at the earliest, or at the latest during the next ordinary session of parliament early in 2015.
Casino legalisation in Japan will be a two-statute process. After an enabling bill legalising casino resorts at the conceptual level, a second piece of legislation would detail the specifics, including how they are administered and regulated.
The Cabinet Committee of Japan’s lower parliamentary chamber started discussions last month on the enabling bill. However, the Japanese parliament is now in recess.
According to media reports, there are at least six prefectural authorities vying to host casino complexes: Osaka, Tokyo, Hokkaido, Nagasaki, Miyazaki and Okinawa.
Dynam posted a profit increase of 1.9 percent for the year ended March 31, to JPY21.3 billion (US$210 million). The company operated 375 pachinko halls in Japan by March-end, 13 more than a year before. Dynam plans to have 1,000 pachinko halls by March 2023.
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