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Approval of Thai study on casino legalization poses to Japan’s IR industry

April 4, 2024 JapanThailand Casino & HotelIndustry Updates

Japan’s steadily developing Integrated Resort (IR) industry faces a serious danger from the Thai cabinet’s potential adoption of a report endorsing the legalization of casino gambling, according to an expert.

According to Joji Kokuryo, Managing Director of the Japan-based consulting firm Bay City Ventures, Japan’s integrated resort (IR) endeavors, like as MGM’s 2030 opening proposal in Osaka, may not perform as well as Thailand’s purported plans to build legal casinos as early as 2029. For a country known for moving slowly when it comes to implementing its own casino ventures, Japan is concerned about this possibility.

Kokuryo issues a warning, pointing out that Thai casinos and entertainment complexes may have an advantage over Japan’s IR projects in terms of player interest and market share, particularly when it comes to luring visitors from South China and Southeast Asia.

He also notes that, in contrast to Japan’s stricter regulations, Thailand’s proposed casino legislation is more enticing to operators and investors due to its longer initial licenses, lower tax rates on Gross Gaming Revenue (GGR), and greater flexibility in resort sizes and investments catered to various markets.

Kokuryo urges the Japanese government to take note of the investor and operator interest that is being diverted from Japan’s IR bidding rounds to developing Asian markets such as Thailand and the UAE. The author highlights that Osaka is the only region recognized by the central government for an IR.

Therefore, to avoid further delays, it is imperative that local authorities promptly resolve environmental issues at the Yumeshima IR site. This is essential to keep the joint venture between MGM and Orix from exercising its exit option, which is good until September 2026.

That being said, not everyone shares Kokuryo’s concerns about the threat posed by Thailand. Thailand’s potential advantage of opening early is mainly the capacity to repay investments more quickly, according to Samuel Yin Shao Yang of Maybank Investment Bank. Yin contends that, in contrast to Singapore’s experience, the success of IRs depends more on factors like location and product quality than on the opening date.

Original story by: IAG

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