Japan’s potential gaming revenues may turn out to be far below the expected $25 billion per year, says Fitch Ratings' senior gaming analyst Alex Bumazhny.
In an interview with CNBC's "Street Signs”, the Fitch analyst instead estimates casino revenues to be between $5 billion and $10 billion annually, far below what industry operators are hoping for.
The reason, says Bumazhny, is that Japanese lawmakers are likely to limit gambling for its locals, similar to that in Singapore.
"I don't think Japan is going to catch up with Macau for the simple reason that I think Japanese lawmakers, when they're making the bills, will limit the amount of gaming that could take place. What we're talking about is two to three large integrated resorts, maybe a couple more regional type of small casinos, so limited amount of positions," he explained.
"And they may even limit locals from gambling or have a fee like they do in Singapore where locals have to pay a fee to get into the casinos. So, all these things may constraint the actual amount of revenue that could be generated in Japan."
Last year’s passing of the integrated resort bill was accompanied by a lot of anti-gambling sentiment, both from the public and from parties in opposition to the bill.
Last week, Osaka-centric national political party Nippon Ishin no Kai preempted possible opposition to its plans to build an integrated resort in the city by proposing new legislation dealing with problem gambling.
According to a report from The Japan Times, the new bill was submitted on Feb. 9 with the aim of addressing problem gambling and other social ills that could arise with the introduction of a casino resort.
“The Nippon Ishin bill sets out a variety of measures to deal with problem gamblers to ensure that the problem is dealt with in a comprehensive manner,” said Hitoshi Asada, the party’s policy chief.
Japan has until December to come up with the rules on how it will regulate the industry, it is also expected to pick the locations and operators to run its first integrated resorts.
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