Macau Business Leaders Worry Osaka’s IR’s Effect on Tourists and Talent

Due to its broad tourist appeal and possible capacity to draw the top executive talent, industry experts have warned Inside Asian Gaming that the legalization of casino gambling in Japan could have a negative effect on Macau and other regional gaming locations.

According to IAG, the government of Japan has given the go-ahead for the development of an integrated resort in Osaka by a group led by MGM Resorts International and a regional partner, Orix. The announcement was made on Friday by Prime Minister Fumio Kishida.

When asked if an Osaka IR may have a detrimental effect on the gambling business in Macau, Ryan Hong-Wai Ho, a lecturer at the Macao Polytechnic University Center for gambling and Tourism Studies, responded that the development was generally “positive for the development of the global gaming industry.”

The launch of a casino in Osaka may offer the chance to draw [more] patrons from these nearby regions, according to Ho. “Japanese and Korean tourists are an important source of patrons for casinos in the Asia-Pacific region,” he added.

He did, however, add that “from another perspective, the emerging gaming jurisdictions such as Japan and Thailand will mean a great demand for talent with practical gaming management experience, as was the case with the liberalization of Macau’s gaming industry.”

When compared to places like Macau, Japan would offer a more alluring travel option for local tourists, according to U Io Hung, President of the Macau Professional Association of Gaming Promoters.

“Osaka is already a well-liked tourist destination for mainland Chinese tourists and it will definitely become Macau’s biggest competitor,” he said, adding that Japan offered distinctive cultural and tourism resources.

The airport in Osaka offers more routes than the one in Macau, and most tourists visit Japan for longer than they do Macau.

“Despite the epidemic, Macau still depends on the mainland market. The gambling industry in Macau and the government must think of other ways to entice tourists from abroad, or Osaka will have a more immediate effect.

U also mentioned that given Japan’s lower 30% tax rate, MGM Resorts might have certain competitive advantages while running an IR in Osaka. In contrast, Macau’s concessionaires pay about 40% of their gross revenue in taxes.

Osaka’s IR will not have any immediate effects, though, as the development’s launch is currently planned for 2029, with a possible later date.