Japan potentially a strong competitor against Macau, says expert

Hester Cheang

A n industry expert has said that Japan’s legalization of gambling in integrated Resorts could potentially cause a threat to the MSAR’s economy, which still relies on gaming.

Hester Cheang, director of the Gaming Teaching and Research Center at Macau Polytechnic Institute told the Times that the MSAR could face challenging competition from Japan in the near future.

Japan’s existing forms of gambling include lotteries, pachinko — a kind of pin-
ball machine — and wagering on horse, auto, bicycle and power boat racing. Casino operators view Japan as a lucrative “final frontier.” In a report this month, analysts at investment bank CLSA estimated the potential market at USD30 billion a year in gross revenue, although  casinos are unlikely to start operating in Japan until 2021 or beyond, after the Tokyo 2020 Olympic Games.

“I cannot say [Japan’s] economy is strong now but I can say they have a good foundation concerning the economy [and] they have a big revenue from pachinko,” Hester Cheang said. “This could be something for our industry to think about,” she added.

The expert admitted that it would still be too early to tell how much of an impact Japan’s future casinos would have on Macau’s economy.

As the land of the rising sun has so much more entertainment to offer in comparison with Macau, Cheang fears that, Japan may draw customers from mainland China and Southeast Asia.

Despite the region having gaming competitors in Asia, the expert said that Japan will be able do a better job in regulating the business than Macau as they can learn from the jurisdiction of the MSAR.

“I think they are in a better position to create a well-regulated industry and with the tourism environment that they can offer, it might be a significant competition,” she said.

In response to the competition, Cheang believes that Macau could provide high quality services and diversified gaming offerings to the region’s expanded tourists.

“We have to be ready to offer different services to tourists and all these services have to be of a high quality,” said the director.

When questioned whether the MSAR is capable of offering high-quality services, Cheang answered, “we have the potential to because the governed is determined and we already have good casino and hotel operators.”

She added that residents are changing how they learn, noting that they are more ready to learn new skills – particularly soft skills.

“These are all good signs of the industry being ready to face upcoming competition,” she noted.

Further, the expert stressed that residents should get out of their inertia, implying that they have to be ready to accept economic changes in the years to come.

“I think we are going in the right direction. […] Those crazy days [with surging gaming revenues] are not very natural so I think we should get into a new way of life,” she concluded. Lynzy Valles with Bloomberg