eSports Stadiums Rushing to Japan, Melco Leads the Race

Melco Resorts & Entertainment Ltd has announced its plans to enter the Japan casino license bidding race. The country legalized gambling venues in 2016, with the bidding unlikely to commence before 2019. Under the newly-adopted law, the country is to issue three licenses in total, with the successful bidders to launch their operations in 2022-23, at the earliest.

Up until now, a number of international casino operators including Caesars Entertainment, Wynn Resorts, and MGM Resorts International, to name a few) have expressed interest in entering the market.

Melco to Relocate Headquarters to Japan?

To our knowledge, however, no one has gone so far as Melco in pledging they will move its headquarters to Japan if successful.

“I would personally move here while we are building it, and we would move the core management team and headquarters here,” says Melco CEO, Lawrence Ho.

This is not the only novelty the company has up its sleeve. According to Melco’s CFO, Geoffrey Davis, an eSports stadium will play the key role in his business’ bid.

Melco already operates a 274-seat eSports venue (Macau Estadium, located at the Cotai casino resort Studio City, Macau). Upon its launch (August 31, 2018), the venue was dubbed “the first of its kind” in Macau. Today, it hosts all major eSports tournaments and virtual gaming leagues, and livestreams sports events from across the globe.

Davis has said it is “very likely” that “the eSports stadium will become one of the key components for our integrated resort (“IR”) in Japan.”

eSports Market Boom

The eSports market has expanded at such a rapid pace that it is nigh impossible to imagine it can step up the expansion any further. Yet, it is predicted to do exactly that. The eSports industry was worth $655m in 2017, $906m (so far) in 2018, and is forecast to hit $1.65bn as early as 2021.

Observed in that light, Melco’s intention doesn’t seem anywhere near being unsustainable… especially if we keep in mind that China and North America alone are expected to generate more than a half of the overall revenue in 2018.

Davis believes that his company’s existing relationship with Chinese customers may well serve as a representative example. He doesn’t hide that Melco plans to include millennials in the grand scheme of things… and “premium mass” customers (big spenders visiting integrated resorts for different purposes than gambling) are not to be easily overlooked, either.

It would seem that the Japanese are in for a rich offer in that regard. Judging by Japan IR Association’s Director of Operations, Ayako Nakayama, an increasing number of competing operators are now including eSports facilities in their integrated resort plans, no doubt as to increase their winning chances.

The winning bidders were initially projected to be selected in late 2019, with the licenses to be issued in the following year. However, analysts agree in the assessment that IRs won’t be opening their doors prior to 2024.

So far, there have been three predictions as to when the IRs may be launched: in 2020, 2022, and 2024. With the latest developments, the latter two appear more likely.

Source:

“Casino Company Melco Envisions Esports as Big Draw for Japan Resort”, Eri Sugiura, asia.nikkei.com, October 15, 2018.