Japan Is the Next Hotly Contested Gaming Markethttp://www.fool.com/investing/general/2014/03/05/japan-is-the-next-hotly-contested-gaming-market.aspx Travis Hoium
March 5, 2014
Just a decade ago, Asia was the next frontier for gaming companies. While that region remains key today, the focus has moved northeast a couple of thousand miles. Instead of Macau being a new growth opportunity for casinos, it's Japan that is drawing attention.
Las Vegas Sands (NYSE: LVS) and MGM Resorts (NYSE: MGM) have each said recently that they're prepared to spend $10 billion on a resort there, while Wynn Resorts (NASDAQ: WYNN) CEO Steve Wynn has indicated interest in spending billions there as well. Caesars Entertainment (NASDAQ: CZR) is already talking with partners about Japan, but given its balance sheet I'd say this is the least likely of the candidates right now to actually make a move in the island nation.
The questions now are whether Japan will allow gaming and how licenses would be awarded.
The debate over casinos rages on
However, there are more questions than answers about what gaming in Japan would look like. Hiroyuki Hosoda, chairman of a cross-party group of legislators who support casinos, said he thinks a bill to allow gaming will be passed by June and wants deliberations over the issue soon. If that happens, it's unlikely casino licenses would be handed out before 2015, leaving a short time frame in which to build billion-dollar resorts.
There are also many outstanding issues, such as how many licenses will be awarded, if local partners will be required, and what locations will be allowed to have gaming. Japan may be a $40 billion gaming market, as analysts at CLSA predict, but that's only if several licenses are awarded and multiple resorts are built. That's no guarantee right now that will happen.
Who will win in Japan?