Fitch Ratings estimates that the first round of IR construction in Japan will create revenues in the US$6 billion range, much smaller than, for example, the Morgan Stanley report of April 11 which foresaw a US$15 billion Japanese IR market developing by 2025.
The credit rating agency explains: “Recent media reports suggest that the Japanese government will opt for only one license in a major metropolitan area, whereas Fitch had previously assumed two or three licenses… Fitch’s $6 billion estimate factors in approximately $3 billion of gaming revenue for one large-scale IR in a major metropolitan area and two remote resorts with revenues of about $1.4 billion each. The major metro IR forecast is largely based on comparisons to other large-scale IRs in gateway markets such as Macau and Singapore with regard to revenues per gaming position and the number of positions.”
They add: “Fitch believes estimating Japan’s gaming revenue potential based on comparisons to other resorts versus other methodologies such as per capita estimates makes more sense in context of the limited capacity that will be allowed by regulations.”
This Dossier results from the “Life After POGOs” editorial project by Asia Gaming Brief which culminated with a pop-up digital forum on 9th December to discuss potentials ramifications in the industry.
The Macau government has added Shijiazhuang, the capital of Hebei province and Shenyang, the capital of Liaoning province, to the list of destinations on which a 14-day mandatory quarantine will be imposed.
Over the years, many of the answers have been remarkably prescient in their forecasts for the near-term direction of Asia’s gaming industry. However, we can safely say that no one came anywhere close to guessing
what 2020 may have had in store.
While nowhere in the world has escaped the economic fallout from the Covid-19 crisis, Macau has been hit harder than most, with forecasts for gross domestic product to shrink more than 50 percent this year.