“Two of the key regulations (casino being only 3% of total gross floor area and 30% revenue tax, on top of consumption, real estate, and income taxes) mean lower returns than many expected,” said Morgan Stanley report.
“In the case of Osaka to make a reasonable return of 14% on a US$8 billion investment and a 15,000-square-metre casino area, it would need to generate gross gaming revenue (GGR) of about US$4 billion, and a VIP and mass table yield of US$36,500 and US$8,500, respectively. That’s much higher than Singapore. We expect the first Japan casino to open by 2025 and the market size could peg at a range of US$11 billion and U$20 billion gaming revenue,” states Morgan Stanley analysts.
The passage of this second enabling bill cleared up several points with an initial limit of three casino resorts and an entry fee of JPY6,000 (US$53) for Japanese players. It will be seven years before any more than the initial three licences will be offered. They will run for 10 years and will then be renewed every five years after that.
No time scale has so far been laid out for when local authorities will officially pitch for the chance to develop one of the first licences.
Despite the warnings from Morgan Stanley, the world’s global casino groups were delighted with the passing of the bill.
Source: GMB
