General Optimism in the Asian Markets and Renewed Focus on Diversification
On the heels of a busy couple of weeks in Asia, The Innovation Group (TIG) team has identified common themes and compiled key insights from the conversations, meetings and sessions they participated in at Japan Gaming Congress and G2E Asia 2019:
Industry Momentum
Industry enthusiasm in Japan continues in earnest despite a continued lack of clarity around the exact process and timing for bringing the implementation law to life (highlighted by news overnightthat the Abe government is pulling back from
the planned July 1 establishment of the Casino Management Board and delivery of IR bidding regulations).
Japanese governments in the larger metropolitan regions as well as those in the outer markets continue to make the case for their regions as casino host communities, with some progressing at notably faster rates than others. Meanwhile, there is an apparent lull in selecting local partner companies either because such partnerships are already established, or the sense of urgency to seal structural relationships has diminished.
Industry stakeholders remains confident about the market fundamentals and conditions for robust growth in Southeast Asia, despite acknowledgement that additional projects and properties may dilute capital returns to some extent.
Regional IRs across Asia have become increasingly competitive with quality facilities, higher levels of service and improved access. Tax regimes and low labor costs are providing additional competitive advantages. For more detail, read Michael Zhu's take on the burgeoning Philippine market here.
A Focus on Diversification and Local Priorities
In Japan, operators are heavily promoting their ability to deliver on "Japanese-style" integrated resorts, demonstrating their sensitivity to local concerns about gaming expansion.
Similarly, the gaming concession retendering process in Macau is expected to focus on stability and diversification. Stability will include preserving Macau's social and public security gains since the liberation of gaming in the city, while increased diversification -- between gaming and beyond gaming, between Macau and beyond Macau, and between VIP and the mass market (as we detailed in this piece) -- is required to further ensure that stability. Macau also is expected to prioritize tourism management, its own branding power and the overall quality of Macau's signature experience.
