INSIDE ASIAN GAMING SEPTEMBER 2018 26 FEATURE IN FOCUS “Throughout these next stages, local Japanese governments, Japanese corporates and casino operators will be working to form consortia, based on shared visions for the IRs and comfort with each member’s leadership teams, among other factors,” CLSA Senior Analyst in Tokyo Jay Defibaugh says. Defibaugh estimates initial IRs, two in major urban centers and one in a so-called regional setting focused on domestic and foreign tourism, will generate US$13.9 billion in gross gaming revenue, with US$25 billion annually in a fully developed market of up to 10 IRs. Morgan Stanley analysis, headed by Managing Director Praveen Choudhary in Hong Kong, pegs the initial market GGR at US$11 billion to US$20 billion, depending on IR locations and final rules. Goldman Sachs Vice President in Tokyo Masaru Sugiyama and colleagues estimate GGR at the low end, ¥1.2 trillion (US$9.05 billion). No IR is expected to open before 2025. NO JUNKETS The junket question has been answered: no. “Casino activities are allowed only for licensed operators and cannot be entrusted to any third entity, including credit to patrons,” Lion’s Eye View MGM Resorts Japan CEO Ed Bowers shares perspectives on the IR process ahead with Inside Asian Gaming Editor-at-Large Muhammad Cohen. EB: MGM will continue to focus on developing strong relationships with potential Japanese equity and content partners. We will also be responding to formal requests for information, concept and proposal from municipalities in which we have an interest. In addition, our journey to better understand all that is unique about Japanese culture and history continues to better prepare for creating the first Japanese IR. MC: What is MGM looking for in IR regulations that will make the biggest difference in how it goes forward? EB: The IR Implementation Law is a lengthy piece of legislation that already provides direction on many of the key issues. We are broadly comfortable with its content. The next stage will be the promulgation of detailed regulations, which we expect to be very detailed. We only have one request: in developing the detailed regulations, allow for a proper period of consultation from industry experts and operators before approving specific regulations. This is an industry best practice, used in Nevada, Singapore and very many other gaming jurisdictions. Providing an opportunity to operators and experts to comment on specific regulations will avoid many adverse unintended consequences in the future practice of those regulations. MC: Does continuing public opposition to IRs matter? Does MGM have plans to help address it? EB: In all jurisdictions there are people that approve of and Muhammad Cohen: How has adoption of the IR Implementation Bill changed what you and your colleagues do? Ed Bowers: Now that we have a real law, everything we do on a daily basis has real consequences. Therefore, our goals and execution strategies are more clearly defined and we will be acting with greater urgency. MC: What next steps does MGM plan to increase its chances of being part of a Japan IR?