Wed, Oct 2, 8:09am by Mia Chapman
Asian countries have quickly got used to the billions in tax revenues from dozens of luxury casino resorts.
Chasing wealthy Chinese tourists amid an economic downturn could be a gamble that might bust though, according to the DW.
Pachinko, a pinball-like slot machine, is Japan’s favourite form of gambling.
The country’s 11,000 Pachinko amusement parlours generate more revenues than the casinos of Las Vegas, Macau and Singapore combined.
But Pachinko playing peaked years ago.
In 2018, the amusements achieved revenues of 20 trillion yen ($180 billion), according to the Japan Productivity Centre, a third less than a decade ago.
As a result of the change in fortunes, last year, Japan’s government liberalised the country’s strict gambling laws to allow the construction of three luxury casino resorts.
Japan plans to make up the lost taxes from Pachinko’s decline by luring China’s growing wealthy and middle-class tourists to the new gambling establishments.
The government said last week that eight cities and prefectures are now involved in a fierce battle to secure the right to host one of the resorts.
“Japan is one of the world’s most advanced economies, so the returns are going to be huge,” associate professor in International Integrated Resort Management at the University of Macau Glenn McCartney said.
“Several of the international gaming giants including all six players in Macau are bidding to rune one of these resorts.”
Several other Asian countries, including Singapore, the Philippines, Cambodia, Vietnam and Malaysia got a major head start on Japan by opening huge palatial-themed casino resorts in the past decade.
Also known as integrated resorts, the gambling is supposed to be just a small part of the overall shopping, entertainment and leisure experience.
Last year, the region’s biggest casinos – including Australia – achieved revenue of $49.23 billion, led by Macau, Asia’s best-known gambling hub since the 1850s when it was a Portuguese colony.
via @PerilofAfrica Asia raises the stakes with $65 billion casino boom: Asian countries have quickly got used to the billions in tax revenues from dozens of luxury casino resorts. But chasing wealthy Chinese tourists amid an economic downturn is a… https://t.co/41obXgeNhH pic.twitter.com/mCqAoC69T1
— MarthaLeah Nangalama (@mlnangalama) September 30, 2019
Macau had already staked its future on taxing casino revenues by the time it returned to Chinese rule in 1999.
The Monte Carlo of the East now has 38 gambling establishments brining in around 40 per cent of the territory’s gross domestic product.
It is still the only place in China where gambling is allowed.
Asia is, however, on course for a potential casino glut.
More than 30 projects are planned in the next five or so years, including the three Japanese resorts, at a total cost of $65 billion.
US research house Union Gaming has warned that governments and casino operators are being overly ambitious as GDP growth in Asia is unlikely to keep pace with the supply of new casinos in the short term.
“As a result, returns will be depressed and numerous projects will be deemed failures,” Union Gaming analysts Grant Govertson and John DeCree said in a recent research note.
The pair suggested that operators should aim to spread their investments “over 15 years rather than 5+ years.”
However, they predicted that as Japan’s new casinos would serve a “highly localized market” the country’s gambling sector would be insulated from any regional downturn.
The Fitch ratings agency has made a similar assessment, warning that China’s economic slowdown is already being felt across Asia’s gaming sector.
“The premium segment has already plateaued in markets such as Singapore and Australia, but investment is continuing across the region, even as China’s economy goes through a structural slowdown,” a recent research note said.
Fitch predicted Macau would see only low single-digit growth at best in the next few years, compared with an 18 per cent rise in 2018.
Instead, the form told DW that casinos targeting mass-market tourists would enjoy steadier revenues because of “the growth of the Chinese middle class and infrastructure across Asia.”
The Advocate reports that the Tasmanian government’s new framework for how it intends to roll out new gaming legislation has been released.…
Spanish casino games creator Red Rake Gaming will be able to further boost its presence through a strategic partnership with leading iGaming…
The 200,000 euro guaranteed Christmas Poker Series at Casino Barcelona from December 9 until December 22 will showcase the best of poker,…