Melco Resorts International believes its MelGuard biometric security system could give the Macau casino company an edge in the Japanese licensing process. The MelGuard system is designed to track the playing habits of Japanese residents and is being touted by Melco CEO Lawrence Ho as a major step forward.

The MelGuard security system would use electronic fingerprint and facial recognition technology to add new Japanese gamblers in the system. Those wondering how the technology works should read about the electronic fingerprint technology on iPhone 8 devices and the facial recognition technology on the iPhone X smartphones.

The information Melco collected would allow the casino company to more effectively track every Japanese gambler’s gaming sessions in their database.

Melco plans to share every bit of data it gets from its customers with the Japanese government, thus helping the country’s regulators collect broad gambling statistics and monitor individual betting sessions.

Motley Fool Predicted MelGuard’s Adoption

Motley Fool predicted Melco’s new MelGuard tracking system could give the Macau casino company an edge when it comes time to apply for one of Japan’s upcoming 3 casino licenses. The investment analysis company also predicted it would require other casino companies who want a Japanese casino license to either adopt the MelGuard system or devise their own tracking software.

Rich Duprey of TMFCop wrote, “Melco will also reportedly give the government free, unfettered access to all of the information its security system collects from visitors. Assuming it’s as effective and all-encompassing as reported, it doesn’t seem like a stretch that the government would mandate the MelGuard system be installed at all casinos, or at least a similar level of monitoring.”

Melco: “Whatever It Takes”

Melco International Resorts appears to be going all-in on the Japanese casino industry. Last year, Lawrence Ho said he would pay “whatever it takes” to secure a casino license in Tokyo or Osaka.

Earlier this year, Melco announced it would be willing to move its corporate headquarters to Japan, if that is what it took to win a casino license. That is a remarkable statement coming from a Macau-based casino company which is listed on the Hong Kong Stock Exchange. It requires on officials in Macau for good regulatory conditions and seeks the favor of investors in Hong Kong.

Lawrence Ho’s Gambling Empire

Lawrence Ho, the 41-year old son of China’s King of Gambling, Stanley Ho, is building a global casino empire, though. Melco International not only owns City of Dreams Macau, Altira Casino, and Studio City on the Cotai Peninsula in Macau, but it also owns City of Dreams Manila in the Philippines.

Melco also is building City of Dreams Mediterranean on the island-nation of Cyprus. Through a different casino company, Lawrence Ho owns the Tigre de Cristal casino near Vladivostok, Russia. He and his father discussed in 2016 the idea of a joint venture in Sochi, Russia — though Stanley Ho’s recent retirement might have ended those talks.

Predictions of Japan’s Casino Market

Lawrence Ho’s commitment to Japan is remarkable, given the disappointment in some quarters about the emerging Japanese casino market. When it was first announced that Japan had approved the IR Bill in December 2016, early predictions suggested Japan’s casino industry would be worth $40 billion a year.

Throughout 2017, reports surfaced that Shinzo Abe’s coalition allies were working to restrict Japan’s residents’ ability to gamble in the new casino. Some reports suggested a total ban on Japanese gamblers in the resorts. By the middle-to-late parts of 2017, gaming analysts lowered the Japanese casino revenue projections to between $10 billion and $25 billion a year.

Morgan Stanley’s Japanese Prediction

Recently, Morgan Stanley lowered its estimate to $15 billion. Motley Fool predicted $6 billion of that revenue would go to the Tokyo Casino, while another $4 billion would go to the Osaka casino. The remaining $5 billion presumably would go to the third casino to be licensed, though that seems to short-change Osaka.

In any case, it is the various restrictions on Japanese gamblers that caused the lower estimate by Morgan Stanley. For instance, each Japanese resident will have to be a $56 entry fee to get inside the casino. Japanese players will be limited to 3 casino visits per week, along with 10 casino visits per month.

Casino floor space will be limited to 3% of the resort’s total floor space. That is the same amount of floor space that Singapore casinos get, though Macau receives 5% floor space reserved for their casinos.

30% Tax Rate on Casino Revenues

Casino gambling will be taxed at a 30% rate. While that is far more than other Asian casinos (besides Macau), the 30% rate is less than Macau’s 39% tax rate. More importantly, it is far less than the 50% tax rate once predicted for the Japanese casino market. In that way, the announced 30% tax rate was good news.

Perhaps that is why Lawrence Ho remains so bullish on the Japanese casino market. Or perhaps Melco International’s CEO realizes that, whatever the restrictions, a casino in Tokyo or Osaka is going to be golden.

Mimicking Singapore’s Success?

Japan’s lawmakers are basing their regulatory framework on Singapore’s casino economy. Singapore only has two casinos, yet it is the third largest casino destination in the world, behind only Macau and Las Vegas. The two casinos, Marina Bay Sands and Resorts World Sentosa, are considered the most lucrative casinos in the world. They might soon have challengers.

About the Author
April Bergman avatar
April Bergman

April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

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April Bergman was a longtime news blogger for BOC. She wrote gaming news posts from January 2013 until September 2018. April also wrote slot reviews, strategy articles, and online casino reviews for the site.

April Bergman began in the online gaming industry in August 2010. From 2010 to 2013, she managed evergreen content for several top online casino. Her duties included developing and maintaining multiple websites in the gaming space. When not writing about online gambling, April loves horse racing, travel, photography, and gardening. She's began in the business as a devoted poker players and spent several years as a card game editor on the now-defunct DMOZ. These days, she lives with her husband and two children in the Toronto metropolitan area.

READ MORE
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