LUCRATIVE BUSINESS: Tokyo and Osaka could be potential cities for casino resorts
INVESTORS' interest in Genting Bhd's stocks is expected to pick up in the near to medium term with news of Japan's plan to revive the liberalisation of its gaming industry.
A foreign news daily reported that Japan had started initiating a plan to liberalise casinos via a proposed legislation to allow gambling resorts to be developed in big cities and regional areas.
Tokyo and Osaka could potentially be among the sites for the casinos.
Alliance Research said if the casino bill is passed during the next legislative session, Japan could open its first casino resort as early as 2019.
"We are positive on the developments and expect buying interests to emerge in Genting," it said yesterday.
The firm has maintained its "trading buy" recommendation on Genting with an unchanged target share price of RM11.24 from RM10.48. This may be reviewed after the release of its third quarter results on November 28.
For investors who are primarily investing in domestic stock exchange but seek exposure to the potentially lucrative gaming liberalisation in Japan, the research house is recommending Genting, which owns a 52 per cent stake in Genting Singapore.
Genting Singapore is mandated to represent Genting Group in bidding for large-scale gaming liberalisation in East Asia, including Japan.
Alliance said this is the most anticipated gaming liberalisation in the region as it has always maintained that should United States offer the most exciting gaming liberalisation theme in the West, then the potential gaming liberalisation in Japan will be the most anticipated gaming event in the East, or even in the gaming world.
This is in view of the sheer size of its economy and the popularity of its existing gaming market with a mere presence of Pachinko and Pachislo.
The latter, a slot machine style game, has commanded lucrative industry revenue estimated to be about 19 trillion yen (RM606.6 billion).
Japan's casino proposals were first mooted by legislators in 2002, but only to be deferred due to political instability and concerns that legal gambling may lead to corruption, money laundering and other crime.
Japanese Prime Minister Shinzo Abe appears to support the casino plan in view of Tokyo's upcoming hosting of the 2020 Summer Olympics, which may induce Japanese lawmakers to liberalise the sector to provide entertainment to visitors.