News Column

Fitch: Japan Could Generate $7bn in Gross Gaming Revenue

February 13, 2014

NEW YORK--(BUSINESS WIRE)-- The potential Japanese casino legalization will be the most heavily followed political process in the industry this year, while Korea and Taiwan also consider gaming liberalization measures, Fitch Ratings says. We estimate two integrated resorts in Tokyo and Osaka could generate roughly $7 billion in gross gaming revenues.

Japan has the potential to rival if not surpass Singapore as the second largest gaming market in the APAC region. The country's pachinko industry currently generates roughly $30 billion in annual revenues.

Gaming liberalization and developments in South Korea may occur sooner than in Japan. Genting Singapore plc, subsidiary of Genting Berhad (both rated A-/Stable) announced last week an agreement with Hong Kong-listed Landing International Development Ltd for a $2.2 billion project on the South Korea island of Jeju. South Korea restricts gaming from locals except for one casino and may consider relaxing those restrictions while loosening other requirements to encourage investment including integrated casino resorts.

These gaming liberalization measures would intensify the Asia-Pacific (APAC) competitive landscape, posing risks and opportunities for all major global players, including Genting, Crown Ltd (BBB/Stable), Las Vegas Sands (BB+/Positive), Wynn (BB/Stable), and MGM (B/Positive).

Macau's next phase of development on the Cotai Strip will open in 2015-2017, while the Philippines gaming market will continue to ramp up materially over the next few years. Gaming exclusivity periods in Sydney, Australia and Singapore expire toward the end of the decade, which could result in additional supply. The Queensland, Australia government is also considering additional licenses in Brisbane.

Fitch released today the second installment of Eye in the Sky: Gaming Jurisdiction Surveillance Monitor - a series of reports that provide an overview of the gaming regulatory and market environment within specific jurisdictions. This installment focuses on the Asia-Pacific region, outlining the regulatory, legislative and market environments in Macau, Singapore, Australia, the Philippines, and Japan.

The reports provide:

-- a summary of gaming (or related) regulations within the jurisdiction

-- relevant revenue and market data

-- a breakdown of market participants and operators with exposure

-- notable risks and constraints

-- viewpoints from Fitch's Sovereign Finance analysts

-- historical and proposed legislation, including links to documents

-- an overview of the legislature and legislative process

-- links to helpful websites

-- major market demographics and visitation statistics

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

Applicable Criteria and Related Research:

Eye in the Sky Series: Macau (Gaming Jurisdiction Surveillance Monitor)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=717376

Eye in the Sky Series: Singapore (Gaming Jurisdiction Surveillance Monitor)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718034

Eye in the Sky Series: Australia (Gaming Jurisdiction Surveillance Monitor)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=722638

Eye in the Sky Series: Philippines (Gaming Jurisdiction Surveillance Monitor)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730176

Eye in the Sky Series: Japan (Gaming Jurisdiction Surveillance Monitor)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732835

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Michael Paladino, +1 212-908-9113

Corporates

Senior Director

33 Whitehall Street

New York, NY

or

Kellie Geressy-Nilsen, +1 212 908-9123

Senior Director

Fitch Wire

One State Street Plaza

New York, NY

Source: Fitch Ratings


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