Flush with cash after hitting the jackpot in Macau and Singapore, international gaming companies are betting on new markets across Asia as governments package economic incentives and rewrite legislation to welcome them. The Philippines, South Korea, Australia, Russia, Taiwan, Sri Lanka, Japan and most of Southeast Asia are trying to attract the region's increasingly affluent and mobile consumers with the lure of glitzy casinos and tourism resorts. "[Asia] is a long way off from saturation where, potentially, new supply would eat into existing operator revenues," said Michael Paladino, a senior director in the corporates department at Fitch Ratings. "The overall pie will continue to grow." Macau took a gamble in the early 2000s and opened up its casino market to foreign operators. The move paid off. The city's 35 casinos generated more than US$45 billion in gaming revenues by the third quarter of last year, according to Fitch, and attracted 29.3 million visitors. In 2007, by comparison, Macau gaming revenues totalled US$10.5 billion. Richard Huang, an investment analyst at CLSA, said Japan and the Philippines were likely to be the most successful new markets. Japan had 130 million people and high per capita income, while the Philippines offered established casino infrastructure, he added. Sites in Osaka and Tokyo have been identified for future casinos modelled on Singapore's integrated resorts - a mix of casinos, hotels, shopping centres and conference centres. "Both markets are built on the assumption that investment will work even without inbound traffic," Huang said. Casino gambling is illegal in Japan but analysts are putting their money on the parliament voting to change that in May. A law could be finalised by 2016 and the first casino opened by 2020. The country permits some gambling in the form of the US$30 billion pachinko industry and casino firms are laying the groundwork for future bids. Paladino said Las Vegas Sands and Genting had the strongest chance of winning a contract given their positive track records in Singapore. Keen to attract more tourists and promote the city as a go-to destination, in 2010 the Singapore authorities overcame decades of hostility towards gambling and allowed the two firms to open integrated hotel resorts combining casinos, convention centres and shopping. The resorts took US$6 billion in revenue in their first year of operation. Gambling is a very lucrative business. If you gamble, you would lose Praveen Choudhary, Morgan Stanley The Singapore model came with a twist - a S$100 (HK$612) daily levy on Singaporean nationals entering the casino floor and a ban on those who were bankrupt or on state aid. The government also introduced an opt-out scheme for potential gambling addicts who can register, or be registered by family members, and then be barred from entering a casino. Regional governments have taken notice of such measures as they weigh the revenue and job creating potential of a casino industry against the social problems associated with gambling. "Gambling is a very lucrative business. If you gamble, you would lose. It is theoretically proven," said Morgan Stanley research managing director Praveen Choudhary. "Governments have to be comfortable with the positive and negatives or the risk/reward spectrum." While the overall trend is towards liberalisation, governments are looking at different ways to combat the downside. Choudhary said they would also look for casino operators with a strong reputation and balance sheet and a proven track record in developing resorts. In South Korea, the government is happy to see Chinese and Japanese visitors lose money at the tables but bars local gamblers from most casinos. However, attempts to attract foreign investors were set back last summer when the government rejected a licence application from American firm Caesars Entertainment because the company did not have a BBB credit rating. Korean officials were recently quoted in the media saying the government was considering less stringent criteria. Gambling has been legal in the Philippines for nearly 40 years but only in 2007 was monopoly provider Philippine Amusement and Gaming allowed to enter into sub-franchise agreements with private investors. Fitch analysts said in a report that US$5 billion was being invested by gaming firms in developments close to Manila, and that Philippine gaming revenues topped US$1.2 billion in 2012. Paladino expects that revenue to grow in the double digits for the next two years. Other regional players include Cambodia, where Hong Kong-listed NagaCorp runs a casino targeting locals and Chinese tourists. The firm would open a casino in Russia in 2018 and is exploring expansion to Thailand and Burma, Morgan Stanley analysts said in a recent report. In Vietnam, the government is looking at possible sites for a casino complex while in Taiwan, there is discussion on turning Quemoy Island, which lies closer to mainland China than the main island of Taiwan, into a gambling centre targeting mainland visitors. Analysts caution governments about assuming they can replicate the Macau experience. While Macau relies on foreign visitors, about 50 per cent were day trippers from Guangdong and Hong Kong, Paladino said. "When you have too much reliance on overseas traffic it increases execution risk," Huang said. Casinos will need to match their expansion to the market size and local economy. It was not long ago that aggressive expansion in Macau and Las Vegas before the financial crisis nearly bankrupted both MGM Resorts International and Las Vegas Sands.