Reputable Macau junket Suncity is looking to enter Japan’s gambling industry. Suncity has joined with other unidentified companies to explore its chances of successfully applying for a license. The country will only be issuing a few. This information was made public during an interview by Asia Gaming Brief with Andrew Lo, the executive director of the company.
Suncity’s projected investments
Lo stated the extent of his investment will be determined by the chosen location of the casino, as well as the final draft of the legislation. He said the consortium was willing to accrue expenses and hire people in a bid to have a more in-depth understanding of the situation. On the matter of the location, Lo said he would be willing to spend up to $50 billion for a sizeable plot of land near the palace. However, on the off-chance that he is given a remote location, he said he would consider spending $500 million.
Japan is currently adding the final touches to its Integrated Resort implementation bill. Questions on how the industry is going to be governed are being worked on by the legislators, as well as issues regarding the procedures for the renewal of licenses and renewal periods. There are other additional matters involving the cap on casino floor size and the high rates of taxation that will also have to be agreed upon for the legislation to be approved.
The scramble for Japan’s casino industry
A sizeable number of casino operators have expressed an interest in entering Japan’s casino market. Most of the interested parties have even expressed the willingness to part with any amount for a chance at this opportunity. Lo, however, has indicated that although he is interested, a high taxation rate would be a deal-breaker for him.
Suncity already has its investment tentacles in the casino markets of other parts of Asia. Among these is its contract for the running of Van Don Casino in the northern region of Vietnam, as well as its 34 percent stake in Hoiana Casino, also in Vietnam. The company is increasing its diversification in its effort to maintain full control of the operations of the properties where it facilitates its VIP clientele.
The Hoiana Casino is projected to be fully operational between the second and third quarters of the coming year. The casino will have a capacity of 140 tables, half of which will cater to the mass-market clients while the other half will be for the VIPs. Lo has stated he expects a table to bring in at least $100 million. This figure is fairly conservative when compared with the revenue collected at The Crown Casino where Suncity operates a single room. The revenue realized there stands at $200 million per table.
Japan’s legislation for casinos
Many international casino owners were elated when Japan made its first major stride toward legalizing casinos. This reaction has been short-lived, however, as the details on the integrated resorts bill are becoming public.
The bill, which represents the final step toward the legalization of casinos in the world’s third-largest economy, has been seen as having a hardline approach that is not favorable to the gaming industry. Most notably is the creation of integrated resorts (IR) instead of casinos.
The IR idea has been fronted as featuring elements that will promote the tourism industry. However, the scant details that have been revealed about the proposed IR have not been well-received.
The bill proposes a size limit of 15,000 square meters of casino floor space of the total IR area. It also proposes a ladder tax rate that will begin at 30 percent for revenue of up to Y300 billion.
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