Japan's Pachinko Hall management company, Dynamic Japan Holdings, wants to enter the casino business, but is likely to avoid competition in Japan's big cities, says Hiroyuki Asakawa, an analyst at Fisco Ltd.
"This is a realistic approach given the size of the company and the risks inherent in the casino business," the analyst added.
Tokyo-based Fisco offers financial investment support services for retail customers.
Hong Kong-based brokerage CLSA said in a February report that the Japanese government is likely to approve two large resorts and smaller regional venues in major cities in the first phase of casino liberalization.
A bill to legalize the industry is pending in the National Assembly. Japan's House of Representatives Cabinet Committee began discussing the revitalization bill in June, but the parliament is currently in recess until autumn.
Mr. Asakawa said, "A full discussion of the bill is likely to take place in an extraordinary session of the National Assembly this fall, but the bill is expected to ultimately become a law."
The Japanese government last month confirmed plans to set up a new organization to coordinate the work of other government agencies working to legalize casino resorts. It is hoped that this measure will accelerate administrative procedures and allow such a first stadium to be opened in time for the Tokyo Olympics.
Several local governments in Japan, including Hokkaido, Chiba, Kanagawa, Osaka, Nagasaki, Miyazaki and Okinawa, have expressed interest in attracting integrated resorts.
"There are no Japanese companies with casino operational know-how, and several companies are trying to acquire such know-how, but this will take a considerable amount of time," the Pisco analyst said.
According to a memo obtained by GGRAcia, Japanese lawmakers have made a clear indication that foreign casino operators are interested in participating in Japan's integrated resorts.
All large Las Vegas operators and Macau operators Galaxy Entertainment Group, Melco Crown Entertainment and SJM Holdings have expressed interest in the Japanese market.
Dynamic Japan has invested a total of $85 million in Macau-based casino services company Macau Legend Development Limited and "may be gaining valuable know-how from the company," said an analyst at Fisco. 슬롯머신
Macao Legends, managed by businessman David Chow Campai, operates the Babylon Casino and Pharaoh Palace Casino at the landmark Macau Hotel under the license of SJM Holdings Limited.
According to Mr. Asakawa, initial investment in integrated resorts could be larger than 1 trillion yen (US$9.8 billion) in the Tokyo metropolitan area.
As such, he added, Japan's land competition in large cities is "severe."
However, the Pachinko operator plans to "avoid such large initial investments and make a decision to enter the casino business based on the optimal use of land, capital and manpower," Asakawa said.
But the analyst warns against many variable factors that are currently in flux, saying it is unpredictable whether Japan's casinos "will attract serious global gamblers like Las Vegas and Macau."
Mr. Asakawa said, "If the casino business is overregulated, it may not be competitive internationally." "It would be prudent to wait for the details and application of the expected law before putting significant resources into the business," he added.
Dynamic Japan said its earnings for the quarter ended June 30 two weeks ago fell 4.8% to $375 million.