• About Us
  • The Team
  • Advertise with Us

The latest news on the gaming industry in Asia

() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()
  • Home
  • Macau
  • Philippines
  • Singapore
  • Japan
  • Rest of Asia
  • World
  • Features
  • Industry Talk
  • Trends & Tech
  • follow
    • Facebook
    • Twitter
    • RSS Feed
    • LinkedIn

Japan casinos likely big earners but capex high: Fitch

Sep 29, 2017 Newsdesk Japan, Latest News, Top of the deck  


Japan casinos likely big earners but capex high: Fitch

A Japanese casino market could generate annual gross gaming revenues of between US$6 billion and US$9 billion, depending on the number of permits, and the “physical footprint” of the venues, suggests Fitch Ratings Inc.

But any Japanese casino project would “likely be expensive” and “may pressure” the credit outlook of the winning bidders, added the ratings house in a press release about the fifth edition of its annual publication on the outlook for the casino industry, “All In: Global Gaming Handbook”.

In February this year, Jim Murren, chairman of MGM Resorts International – a company considered by some analysts as a likely front runner for a Japan permit – said a possible US$10-billion price tag for a Japan resort was a “good number” in terms of a current reference point for the market.

“Fitch would take a cautious view of the winning bidders’ credit profiles during the development phase, particularly as financing is sorted out,” said an extract from the report.

The ratings house said Japan’s Integrated Resorts Implementation Bill – likely now to be delayed until at least the spring of next year due to Japan’s snap election due in October – “would determine critical details including the number of casinos permitted and potential visitation restrictions for Japanese nationals”.

In August, Japan’s Office of Integrated Resort Regime Promotion – known as the IR Promotion Secretariat – suggested setting an “upper limit” to the size of casino floors in Japan, but it did not suggest what that limit should be, according to local media reports. Some media outlets had previously mentioned the possibility of casino floors being restricted to 15,000 square metres (161,459 sq feet).

“For gaming operators, Japan provides an opportunity to diversify their holdings and capitalise on the market’s solid supply-demand dynamics,” said Alex Bumazhny, Fitch’s senior director, U.S. corporates.

But he added: “Those benefits come at a cost – any Japanese project would likely be expensive and may pressure credit metrics.”

It is not currently clear however what size of equity stake a foreign casino operator might be able to take in a Japanese project. The U.S. project finance model – typically based on debt and/or equity issuance – might not be as appealing in Japan, where many of the country’s corporate businesses are cash-rich but yield-poor, say some industry commentators.

A June report from investment services firm Morningstar Inc had mentioned a possible US$10 billion capital expenditure for any casino resort that might be located in the city of Osaka, and a likely annual return on invested capital amounting to 17 percent; and a US$11-billion spend being required in Yokohama, with a 20 percent annual return.

But Morningstar said in follow-up note this month that the regulatory framework proposed in August “could reduce revenue projections”.


  • tweet
Related articles
  • Wynn restates Japan interest, despite not chasing Yokohama
    Wynn restates Japan interest, despite...

    Feb 04, 2021  

  • Yokohama budgets US$3.4mln in 2021 for casino tilt
    Yokohama budgets US$3.4mln in 2021 for...

    Feb 01, 2021  

More news
  • Sci Games title ‘Hurricane Horse’ approved within Apac
    Sci Games title ‘Hurricane Horse’...

    Mar 01, 2021  

  • RGB loss slims sequentially for 4Q, annual loss US$7mln
    RGB loss slims sequentially for 4Q,...

    Mar 01, 2021  


Latest News

Sci Games title ‘Hurricane Horse’ approved within Apac

Sci Games title ‘Hurricane Horse’ approved within Apac

Mar 01, 2021  

Scientific Games Corp says it has approval within Asia-Pacific (Apac) for “Hurricane Horse” (pictured), the third Duo Fu Duo Cai-series game on the DualosX cabinet. The company said in an email...
Read More
RGB loss slims sequentially for 4Q, annual loss US$7mln

RGB loss slims sequentially for 4Q, annual loss US$7mln

Mar 01, 2021  

Macau casino GGR down 9pct m-o-m in February: govt

Macau casino GGR down 9pct m-o-m in February: govt

Mar 01, 2021  

Sign up to our FREE Newsletter

UB8V5.qr.16(Click here for more)

Partners

Pick of the Day

”While our financial results for fiscal 2020 were clearly impacted by the pandemic, they also highlighted our strengths, and the effectiveness of our business’ response"

Trevor Croker

Managing director of casino slot machine maker and digital games provider Aristocrat Leisure



Most Popular

  • Macau VIP challenged by changes in China: Galaxy Ent bossMacau VIP challenged by changes in China: Galaxy Ent boss February 25, 2021
  • Melco’s Lawrence Ho hopeful on Macau recovery in MarchMelco’s Lawrence Ho hopeful on Macau recovery in March February 26, 2021
  • Suncity to open clubs at Londoner Macao, Lisboa PalaceSuncity to open clubs at Londoner Macao, Lisboa Palace February 26, 2021
  • Galaxy Macau to add Raffles-branded hotel towerGalaxy Macau to add Raffles-branded hotel tower March 1, 2021
  • Macau casino GGR soared in final days of CNY: brokeragesMacau casino GGR soared in final days of CNY: brokerages February 23, 2021
Copyright 2014-2020 TEAM Publishing and Consultancy Ltd / All rights reserved
  • Code of Ethics
  • Privacy Policy
  • Useful Links
  • Contact Us