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Japan low jobless rate concern for casino ops: MS

May 20, 2019 Newsdesk Japan, Latest News, Top of the deck  


Japan low jobless rate concern for casino ops: MS

Japan’s “very low unemployment” could be a major problem for international casino firms hoping to hire thousands of locals, should such firms win one of up to three casino licences on offer in first-phase liberalisation.

That is a view expressed by banking group Morgan Stanley, in a Sunday report issued after some of its staff attended last week two conferences in Japan about that country’s nascent gaming industry, and spoke to management representatives of some of the suitor companies.

“Very low unemployment at only 2.5 percent, with skilled labour shortage [is] a major concern for IRs,” said Morgan Stanley, referring to integrated resorts or “IRs” the term used in Japan to describe large-scale casino complexes.

Chris Gordon, president of Wynn Resorts Development LLC, representing Wynn Resorts Ltd, one of the brands that is a suitor in Japan, said on Friday in a presentation to one of last week’s conferences – the Japan Gaming Congress in Tokyo – that the group’s forecast for workforce numbers was “between 11,000 and 16,000 new employees,” which he described as a “daunting task” recruitment-wise.

Morgan Stanley noted, citing some voices in the industry, and referring first to Japan’s long-standing liking for automation and use of robotic machines for some workplace and consumer-facing tasks: “The hope is that this can be solved by technology”. There was also hope within the industry that in future “higher female participation in the workforce” in Japan would help provide workers for casino resorts.

The banking institution further noted regarding conversations last week in Japan: “Operators were also encouraged by recent steps by the government on imported labour, with the enactment of a new bill in December 2018 to attract more than 345,000 foreign blue-collar workers over the next five years.”

Morgan Stanley said it was also “concerned about returns” for a Japan casino market during what appeared to be a bidding war among international casino brands looking to enter the market.

The banking institution wrote: “All the operators we met with suggested they would spend more than US$10 billion in Osaka, Tokyo, or Yokohama, while even potential regional developers suggested they would spend US$2.5 billion to US$3 billion to give the government what it wants (hotel space of more than 100,000 square metres [1.08 million sq feet] and convention space of more than 60,000 sq ms that can accommodate more than 3,000 people).”

Morgan Stanley further noted: “Given the competition and inflation, we are worried development prices are getting bid up and are diminishing returns.”

The institution did however forecast Japan could be a US$15 billion-market annually in terms of gaming revenue, “more than double Singapore or Las Vegas”.

The banking group said nonetheless that “key questions” remained “unanswered” for the industry. These included the percentage ownership split between foreign casino firms and local partners or consortiums; and of a possible three licences initially, how many would go to major cities and how many to smaller regional centres.


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