Daily Finance – Following the footsteps of Macau, Singapore, and the Philippines, Japan appears poised to clear away regulatory barriers and allow legalized gambling in casinos. Analysts at Citi believe that Japan could become the second-largest gambling venue in Asia after Macau. Japan could generate gross gaming revenue of $13.4 to $15 billion annually. The topic of opening a casino in Singapore can be traced back to 2005 when key legislation and administrative infrastructure were put in place. Five years later two integrated casino resorts opened their doors, Las Vegas Sands ‘ Marina Bay Sands and Resorts World’s Sentosa. Within two years tourism receipts in the country doubled from SGD 12.6 billion in 2009 to SGD 23.0 billion in 2012.
The Japanese government has an objective of increasing the number of overseas tourists from 8.37 million in 2012 to 18 million in 2016, 25 million in 2020, and 30 million in 2030. These aggressive targets could serve as a subtle hint that casinos, as part of integrated tourist resorts, are expected to play a big role in Japan’s ability to meet these targets. Several key international players have legitimate shots of receiving gaming licences in Japan. Las Vegas Sands would be the top pick along with Melco Crown. Meanwhile MGM Resorts is unlikely to emerge a winner.
Las Vegas Sands has a tremendous record in Asia, and the company will generate billions of dollars of free cash flow from its properties around the world in 2016. The financing for any Japan project should be no problem, especially after management decided to forego its $30 billion investment in Spain. The company only has one project in the pipeline, a $2.7 billion investment in its Parisian project in Cotai, Macau that is set to open by the end of 2015. Las Vegas Sands became the first foreign player to open casinos in both the Macau Peninsula and Cotai, and the company can leverage this experience in Japan.
