As Japan’s lawmakers move toward authorizing a multibillion-dollar casino industry, leaders from an array of Japanese businesses have begun angling for a piece of the action.
Takeshi Niinami, chief executive of convenience store giant Lawson Inc., and Singo Torii, executive vice president of Suntory Holdings, the country’s third-largest brewer, are spearheading the formation of a group of private- and public-sector and non-profit leaders to support legalization.
Along with the 2020 Tokyo Olympics, allowing casino resorts in Japan “will provide a spark for not just tourism, but also for the revitalization of local economies in the countryside,” said Hiroshi Mizohata, a former head of the Japan Tourism Agency and a member of the group. “We want to get various stakeholders involved.”
Mizohata told Bloomberg the group will work closely with lawmakers, make policy recommendations in collaboration with local governments and companies and advocate with the public. The group plans to recruit members from local governments, business lobbies and companies and academia and will be financed by membership fees, Mizohata said. He said the group won’t accept funding from casino operators.
The group has scheduled an initial meeting for early in February and plans to officially launch in May, which is about when observers expect the Diet, as the national legislature is called, to pass a bill creating a legal framework for casinos, effectively decriminalizing them. The bill is backed by the governing Liberal Democratic Party, with Prime Minister Shinzo Abe’s reported support, and will be followed by a second legislative package detailing regulations and taxes. This is expected to pass sometime in the first half of 2015, meaning the first casino should open in Tokyo prior to the Olympics. Analysts at Citi say they believe a request-for-proposal process could commence as early as this year.
Observers believe four casinos will be authorized initially: one each for Tokyo and Osaka and two regional areas to be determined. These will be on a resort scale and will feature hotels and significant non-gaming attractions, including convention and meeting facilities, dining, retail shopping and entertainment.
Given its position as the world’s third-largest economy, its popularity as an international tourism destination, and the massive amount of domestic gambling the country hosts on horse, boat and bicycle races and the Japanese-style machine games known as pachinko, Japan could generate US$10 billion in annual gaming revenue out of the gate, investment analysts say. This would elevate it to the second-largest casino market in the world, behind only Macau, and has drawn interest from just about every major global name in the industry.
“Foreign investment is viewed as essential to success in the two major cities, and hence we suspect they will see majority foreign ownership,” Macquarie Securities gaming analyst David Gibson told the Las Vegas Review-Journal. “Regional will have more local involvement.”
Bloomberg News reports that officials of Osaka Prefecture have already held preliminary talks with executives of Malaysia’s Genting Group and Las Vegas-based Caesars Entertainment and were planning to meet with executives of Las Vegas-based MGM Resorts International, which also operates in Macau.
