Japan’s casino impact on Singapore’s integrated resorts

Japan is preparing to welcome customers to its first casino in the western city of Osaka, a man-made island called Yumeshima. The venture, backed by a consortium including MGM Resorts, is expected to cost ¥1.08 trillion (US$7.9 billion), making it the most expensive integrated resort ever built.

When it finally opens, Singapore’s established integrated resorts, Marina Bay Sands (MBS) and Resorts World Sentosa (RWS), will already be celebrating their 20th anniversary. With a combined expansion worth S$9 billion (US$6.75 billion), will these two incumbents be able to withstand the Japanese competition? Or will MGM Osaka, built with the same initial investments as MBS and RWS, capture their market dominance?

With a growing Asian leisure market and the attractive appeal of Japan to Chinese tourists, who represent the largest demographic segment in the casino industry, it seems inevitable that existing Asian resorts may have to forfeit market share to Japan. Osaka’s planned integrated resort is projected to generate annual revenue of ¥520 billion, more than double RWS’s turnover and 20% higher than MBS’s pre-pandemic figures. Officials in Osaka are hoping that the “bakugai” phenomenon of explosive spending by Chinese tourists will be recreated on casino floors.

Japan may not be the only threat to Singapore’s integrated resorts, as Thailand continues to make strides in legalising casino gambling, with plans to build entertainment complexes in up to five locations across the country. If Thailand maintains its current momentum, it could pose a more significant challenge to Singapore than Japan, due partially to its closer proximity.

Additionally, the exclusivity extension for Genting and Las Vegas Sands, the owners of RWS and MBS respectively, is set to expire in 2030. As the Singapore gaming industry tries to maintain its leading position, it might need to reinvent itself. This could involve changes in ownership, especially as the younger generations take over the family businesses.

It is essential for Singapore’s integrated resorts to adapt to changing market dynamics, especially as new contenders like MGM Osaka join the fray. By staying aligned with the country’s tourism strategy and long-term economic goals, Singapore can keep its casino resorts one step ahead and remain a competitive force within the growing leisure industry.