“If only one metropolitan area is selected with two regional integrated resorts (IRs), the revenue would be lower,” said a team of Sanford Bernstein analysts in a report released on Tuesday.
“We would estimate with two major properties (Osaka and Yokohama, for example) and one regional property, GGR at ramp up could be in the range of US$7 billion to US$8 billion,” Sanford Bernstein analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu wrote.
They added: “Non-gaming revenue (which in Macau represents less than 10% of gross revenues and in Singapore 25%) would be a higher percentage in Japan and could be in the US$2 billion to US$3 billion range. Thus, total gross revenues for two metropolitan-city IRs and one regional IR could reach US$9 billion to US$11 billion.”
The analysts cautioned that the potential size of Japan’s gaming market was “speculative” at this stage and an act of “guesstimation”.
The brokerage additionally estimated that Japan’s gaming industry could “take some gaming market share” from other gaming destinations in Asia, such as South Korea and Philippines; but the analysts forecast a more limited impact on Macau’s gaming industry.
“The three Japan IRs that will be authorised in the first round will be located across the country in three different municipalities. This is [a] very different market structure of creating a centrally located critical mass (like Macau, Manila, and Singapore which all benefit from their critical mass locations),” the Sanford Bernstein analysts wrote.
Source: GMB / GGR Asia
