The global leisure and entertainment sector witnessed $796m of FDI in 2015, a figure that shot up to $3.1bn in 2018 and $2.8bn the year after, according to fDi Markets, an FT data service tracking greenfield crossborder investment. 

The Asia-Pacific region stands out as the most popular destination for FDI projects in leisure and entertainment, showing outstanding growth between 2014 to 2019. Foreign investment to the sector went from $427m in 2014 to $3.1bn in 2019, following a record high year in 2018 with $5.1bn, according to fDi Markets.

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Resilient sector

Investment in leisure has been resilient, despite several years of global political and economic instability that have decreased global consumer confidence, according to a recent study from Deloitte. Today’s consumers are increasingly interested in ‘experiences’, rather than in material items or even saving money, finds the report. 

Rising leisure spending is also linked to increased social media activity, with evermore people sharing their experiences online, finds the report. 

Investors are responding to augmented demand, especially in the casinos and gambling industry. Sports betting rose significantly in the last four years due to increased gambling legalisation around the world.

Countries with huge market potential that have recently eased regulation in the gambling industry include the US - following the repeal of PASPA, the Professional and Amateurs Sports Protection Act, in 2018 – Brazil, Japan and Argentina.

The US betting market reached almost $1bn in revenue at the end of 2018 – when the legalisation process was beginning – with one-third of this coming from New Jersey, which was one of the first states to repeal PASPA.

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Japan rising

Foreign investment into Japan’s leisure and entertainment industry has been particularly strong, following the legalisation of gambling in 2016. 

Some of the largest contributions have come from the Asian subsidiaries of Wynn Resorts, such as Wynn Macau and Wynn Resorts Development Japan, who have been consistently active in recent years.  

Japan attracted just $24m of FDI to the sector in 2014, a figure that jumped to $300m in 2019, according to fDi Markets

Different gambling authorities have rushed to supply the new demand in Japan. Las Vegas Sands is considering a $10bn to $12bn investment over the next three years, in expansion projects across Tokyo. 

The Mohegan Tribal Gambling Authority (MGE) was prepared to begin construction for its $4bn integrated casino in Hokkaido. However, due to recent environmental concerns, it appears that many projects in Hokkaido are on hold.

A full report on the environmental sustainability of integrated casinos in Hokkaido will be ready by mid 2021, according to the Japanese government. 

In addition, Japan has not yet passed regulations for the new gambling industry, meaning a large grey legal area remains. This has dampened the rush of gambling companies into the country. 

However, it remains to be seen how the global non-digital leisure and entertainment market contracts in the wake of the coronavirus outbreak. The market is heavily linked to the tourism sector, which has been devastated by the crisis. 

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