Inside Asian Gaming

IAG JAPAN AUG 2019 58 COLUMNISTS Meanwhile, the creation of the government office continues what will eventually propagate these rules as well as govern the entity once the commission is established. This new agency, whose funding was established through the last ordinary session of the Diet, will reside within the Japanese Ministry of Land, Infrastructure, Transport and Tourism. During JgC, one of the more informative panels that will help shape the future of integrated resorts was the final panel on the last day, featuring several C-Suite executives from some of the leading IR bidders. The panel highlighted some of the challenges that exist with the length of the licensee term, which is currently set at five years, and the ability to finance such an intensive project based on this term, which is relatively short compared to other major jurisdictions. In Macau, where the concessions of SJM and MGMwere recently extended to 2022, all concessionaires are now on the same timeline where each is set to expire in 2022, providing most operators with a 20-year license term. Singapore has also recently renewed its two licensees with 10-year extensions and further investment in the market beyond the initial 10-year term that was set to expire. The five-year window in Japan provides difficulty for operators that are interested in the large and regional locations, as the scope and reach of these projects will require a significant amount of investment. Many public reports have estimated these costs at US$10 billion or higher for an initial round of investment in a casino, hotel, MICE, entertainment, retail, F&B and other non-gaming amenities in these iconic facilities. It will be difficult for operators to realize the return on investment of these facilities within the margins of a five-year license term. Most projects of this scale typically anticipate a seven-year payback on these facilities, and taking away two years of this period provides complications in terms of the viability of the project given the limited length of time they are guaranteed a license. While it is viewed that any operator will need a Japanese partner(s) for their bid to be competitive, this fact adds a degree of stress to the level of debt-to-equity ratio that will be required for the project. Most participants on the JgC panel contended the Japanese banks that would serve as likely partners have been open to this level of investment. However, it remains an open-ended question on how much international money may flow into the market because of the shorter term and the costs associated with borrowing money under these conditions. It likely gives operators with stronger balance sheets a greater advantage than those that are more heavily leveraged. Many of the panelists agreed the split will hover around 50/50. Understanding the dynamics of the financial 5年という期間をベースに、この高額なプロジェクトの資金を調 達 する能力に焦点を当てて議論が行われた。マカオでは最近SJMと MGMのコンセッション（ライセンス）が2022年に延長され、全ての コンセッション（ライセンス）保有者がそれぞれ2022年の期限に設 定されている同じタイムラインに足並みを揃えており、大半の事業 者に20年というライセンス期間が与えられている。シンガポールも 最近2つのライセンスを10年間延長し、当初の10年という期限を越 えた市場への投資を確保している。 地方の広大な土地に興味を持つ事業者にとっては日本の5年 という枠は厳しい。なぜならこれらのプロジェクトのスコープ(サー ビス範囲)とリーチ(到達範囲)には巨額の投資が求められるから だ。多くの公開レポートが、これらの象徴的な施設のカジノ、ホテ ル、MICE、エンターテイメント、小売、飲食そしてその他ゲーミング 以外の設備への初期投資には100億米ドル（約1兆900億円）以上 の費用がかかると予想している。事業者にとって、5年というライセ ンス期間の中でそれら施設への投資のリターンを実現させるのは 困難だろう。 一般的に、この規模の大半のプロジェクトはそれらへの投資を 7年間で回収することを想定しており、ライセンスが保証される期 間が限られていることを考えると、その期間の2年間を奪うことは プロジェクトの実行可能性をより困難なものにしてしまう。いずれ の事業者も入札で優位に立つためには日本のパートナー企業(1 社またはそれ以上)が必要であると見られている一方で、この事実 はプロジェクトに求められるであろう負債比率のレベルに幾分か