The recent scandal involving Wynn Resorts and its former Chairman and CEO Steve Wynn shouldn’t negatively impact its chances of securing a Japan IR license, according to CLSA Senior Analyst Jay Defibaugh, with the company’s high-end focus considered a perfect match for Japan.
Defibaugh was one of a number of experts speaking on a keynote panel titled “All eyes on Japan” at the ASEAN Gaming Summit at Conrad Manila on Wednesday. Also present was Shingetsu News Agency President Michael Penn, Managing Director of Spectrum Gaming Group Fredric Gushin, SVP Business Development – Casinos, Asia at Hard Rock Daniel Cheng and Senior Manager of the IR Team at PWC Masahiro Terada.
Asked about the leading contenders to win an IR license should Japanese lawmakers pass the long-awaited IR Implementation Bill later this year, Defibaugh pointed to Las Vegas Sands and MGM Resorts as the standout contenders, but also threw Wynn Resorts into the mix.
“Wynn’s rabid focus on details meshes well with Japan because they are very details oriented,” he said.
Terada said there were “a handful of operators” already being considered by the government as leading contenders with five to seven currently leading the race to the finish line.
While panel estimates of Japan’s potential gross gaming revenue from an IR industry reached as high as US$40 million, Defibaugh pegged the figure at closer to US$25 billion based on the prospect of two urban style IRs – most likely in Tokyo and Osaka – and around 10 regional properties.
“They will start with two to three with the long-term goal being to have over 10 across the country,” he said, adding that CLSA had now revised its realistic launch date for the nation’s first IRs to 2025 or 2026.
Hokkaido and Nagasaki are considered the best options for regional casinos.
“Criminal” junkets on the outer
Shingetsu News Agency President and panel moderator Michael Penn lit the fuse with his assessment of Asia’s booming junket industry, claiming that the VIP operators that have played such a vital role in Macau’s success would not be welcome on Japanese soil.
“I can tell you that Japanese regulators have concluded that junkets equal money laundering opportunities for criminals,” he said.
Terada added that, “Clearly we have to ban money laundering and Yakuza business, while Gushin said, “Junkets are on the wrong side of history.”
Not all agreed with such an assessment though, with Hard Rock’s Cheng stating, “Junkets get a bad wrap. There are legitimate and good junkets, not all junkets are bad.”
Either way, added Defibaugh, the risk of bad credit would remain.
“Even if we don’t have junkets, we will have VIP which will put the operators’ balance sheets at risk,” he said.
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