A worldwide gaming and hospitality consultant has issued a report that says a strip of full-scale resorts on Osaka’s Yumeshima Island in Japan could generate $10.9 billion a year in gaming revenue and rival Las Vegas, Macau and Singapore as a tourism destination.
Global Market Advisors, which has a Las Vegas office, published the executive summary of a white paper it plans to distribute May 1 that will describe various development options as Japanese government leaders work toward establishing policies for casino gaming expected to be enacted by the end of the year.
Last year, Japan’s National Diet, the nation’s legislature, approved a plan to draft procedures for developing full-scale resorts. Global Market Advisors researchers say the Diet will determine approximate locations for resorts by the third quarter of 2018 with a request-for-proposals process that would pick casino concessionaires by the third quarter of 2019. GMA believes that 2023 would be the first potential year for a resort to open.
Las Vegas’ four largest casino companies — MGM Resorts International, Caesars Entertainment, Las Vegas Sands and Wynn Resorts — have shown interest in entering the Japanese market, estimated at $24.2 billion a year in gaming revenue at buildout.
GMA says building the so-called Osaka Strip could appeal to Japanese lawmakers because it has the potential of attracting the most tourists from other countries. The company’s research shows multiple operators in Osaka could draw 47 percent of its visitors from other countries.
Japan traditionally draws tourists from China, South Korea and Taiwan.
Other scenarios studied by GMA have the potential to generate more revenue, but it’s estimated those would draw more domestic customers and fewer international tourists.
The prospect of building on sites in Osaka, Tokyo, Sasebo and Hokkaido would generate an estimated $14.3 billion in gaming revenue a year, but draw only 23 percent of its visitors from other countries. In another scenario, building on sites in Osaka and Yokohama would generate $12.5 billion a year, but attract just 25 percent of its visitors from out of the country.
Steve Gallaway, managing partner of GMA, said one of the goals of Japan’s full-scale resort legislation is to increase tourism so it introduced the “Osaka Strip” concept of multiple operators on Yumeshima Island.
“Developing the Osaka site, with multiple operators on the ‘Osaka Strip,’ would create critical mass and a true tourist destination,” Gallaway said. “This would compete with Las Vegas, Macau and Singapore in generating nearly $11 billion from that district alone.”
Several companies operate resorts on or near the Las Vegas Strip. In Macau, Las Vegas Sands has led the development of the Cotai Strip which also has Asian casino operators in addition to Wynn and, later this year, MGM.
In Singapore, there are two casino operators, Las Vegas Sands and Genting, which is gearing to build on the Las Vegas Strip.
GMA said one of the biggest issues under study in the resort development legislation the Diet is considering involves responsible gaming. GMA expects operators submitting proposals will be evaluated on responsible gaming initiatives carried out in other jurisdictions.
Bo Bernhard, executive director of UNLV’s International Gaming Institute, assisted GMA on responsible gaming research.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.
Contact Richard N. Velotta at email@example.com or 702-477-3893. Follow @RickVelotta on Twitter.
Casino companies that have expressed an interest in building in Japan:
-MGM Resorts International. Reuters reported in February that MGM has expanded its Tokyo office and hired 15 employees focused on marketing research and building relationships with local companies. Chairman and CEO Jim Murren has said MGM is willing to invest $10 billion on Japan.
-Las Vegas Sands. The company has shown interest in developing a full-scale resort similar to its successful property in Singapore. Reuters reported that Chairman and CEO Sheldon Adelson said a resort in Japan could cost $10 billion to develop.
-Caesars Entertainment. In January, the company said it is making plans to invest in a South Korea project as well as investigate opportunities in Japan, indicating a Japanese project could cost $5 billion.
-Wynn Resorts. Chairman and CEO Steve Wynn has expressed interest in Japan in the past and has said the company would look at investing as much as $10 billion there, but analysts say the company may be restricted in what it can do after the recent opening of Wynn Palace in Macau.
-Melco Crown Entertainment. In a Reuters report, Hong Kong-based Melco Crown’s chairman and CEO, Lawrence Ho, said in February his company would be willing to outspend rivals in order to win a concession in Japan.
-Hard Rock International. With 24 hotels and 11 casinos worldwide, Orlando-based Hard Rock — which isn’t affiliated with the Hard Rock Casino in Las Vegas — has brand familiarity in Japan with six Hard Rock Cafes and in January opened a Japan division to study opportunities there.