Gaming insights Gaming

Local ownership to play key Japan role

Written by Ben Blaschke

Japanese regulators are likely to have a significant focus on local ownership when issuing casino licenses, according to Wells Fargo.

Japan this week passed legislation to legalize casinos, with a second bill that sets out the precise framework for the nation’s burgeoning casino industry to follow in 2017. The news has been followed closely by operators across the globe, many of whom will be keen to be part of an industry estimated to be worth around US$20 billion.

But Wells Fargo analysts Cameron McKnight and Robert Shore believe foreign operators may be somewhat disappointed in the level of input they are allowed to have.

“One thing that is clear from our conservations with industry and operator contacts is that there will be a focus on local ownership,” they said. “The major gaming operators will likely need to partner with one or likely multiple partners to bid on a license. Various operators have taken different stances with respect to forging local relationships and having a presence on the ground in Japan.

“Some are waiting for the enabling regulations to be established before putting resources on the group while some operators have been actively involved the past few years. We do think there will be a strong emphasis on local ownership, and it’s possible US operators could end up with 25 to 40 percent ownership interests, which is likely below expectations.”