Australian casino tycoon James Packer appears to be very interested to enter the newly opened Japanese gambling market and has made it a key focus area for his company, Crown Resorts.
According to a recent media report in Australia, the recent organizational overhaul carried out at Crown Resorts was in preparation for making a determined bid to enter the lucrative Japanese market. Analysts have estimated annual gaming revenue in Japan to be in the region of $32 billion by 2030, making it one of the largest gaming markets worldwide.
Japan legalized gambling in December 2016 by passing the IR [Integrated Resorts] Promotion Bill. A second bill dealing with the specifics of the industry’s structuring and regulation is said to be under works. The government has so far been tight lipped about its approach.
All major international casino operators have however kicked off preparations so as to be ready when the licensing process starts. Casino officials are already said to be courting local governments in some of the more influential districts. The current understanding of the licensing process is that each region will pick one operator with whom it will work. These regions will submit their proposals to the central government who will then carry out a bidding process.
Licenses will finally be issued to two or three of the top bidders. Sources believe that this complex and long-drawn process may require investments running into billions. Some estimates have indicated that nearly $6 to $10 billion of investment would be needed for developing a single resort, which means that a company like Crown Resorts must have sufficient funding to be considered as a serious contender.
International casino operators will most likely partner with local banks, financial consortiums and real estate or construction companies for funding and project development but will still have to be the major financial contributors for the integrated casino resort.
Sources quoted in the media report have indicated that Japanese governments may prefer to work with Australian casino operators rather than those from the U.S, which increases the odds of success for Crown Resorts. But this also means that the company must have access to enough funds to make it happen.
Industry observers believe that the need for large financial investments might have been the reason why Packer decided to completely restructure the business earlier this year. Crown Resorts decided to exit from nearly all of its international ventures including in the gaming hub of Macau and put off an IPO plan, vowing to focus only on its Australian businesses. However it looks like the lucrative Japanese market is too good for Crown Resorts to pass on.