News agencies report that Japan’s ruling Liberal Democratic Party may submit its revised bill for integrated resorts to the parliament by April 27. If that happens, it clears a path for site selection and bidding by operators.
According to Reuters, Chikako Ikeda, an official at the LDP’s political affairs committee, said the Integrated Resorts Implementation Bill will go to lawmakers Friday, earlier than expected; some analysts had figured it would stall until the second half of 2018 or early 2019. In any event, the bill may not pass during the current session of parliament that ends June 20 because of other matters on the agenda.
Muddying the waters is the scandal surrounding Prime Minister Shinzo Abe, accused of signing off on a shady land sale that also involved his wife, Akie. Abe was the prime mover of casino legislation and has said it’s an important move to stoke international tourism to Japan. Some observers say the issue could force Abe to resign in June.
Making matters worse, a member of Abe’s Finance Ministry recently resigned following allegations of sexual harassment. Junichi Fukuda made his exit after recorded conversations became public in which a voice identified as his made a number of crude sexual remarks. Fukuda resigned, but said he does not recognize the voice on the tape as his own.
Junichiro Koizumi, the 56th prime minister, told the Weekly Asahi, “The situation is getting dangerous” for Abe. Public opinion polls show that his approval ratings have dropped to 37 percent; one poll put the number under 27 percent.
Earlier this month the LDP and its junior partner, the Buddhist-aligned Komeito, reached agreements on key issues surrounding IRs, limiting them to three locations to start, with the possibility the industry may expand seven years later. They also agreed that gaming floors may occupy only 3 percent of a total resort area. That cap will likely influence the size of investment by casino operators, and probably rule out smaller, regional properties in Hokkaido and Nagasaki, said Jay Defibaugh, an analyst at CLSA.
“The floor space restriction of 3 percent is a burden for anything but a very large integrated resort,” which would probably be sited in Osaka, Tokyo or Yokohama, he said.
The coalition partners also agreed on a 30 percent tax on casino revenue and an entry fee of 6,000 yen ($56) for residents of Japan.
Among the most ardent suitors for a Japan IR are Melco Resorts & Entertainment CEO Lawrence Ho and Las Vegas Sands Chairman Sheldon Adelson, both of whom have pledged to spend $10 billion. Genting is also preparing a bid, and a number of other global operators have opened offices in Japan, waiting for the race to begin.
CalvinAyre.com predicts that Japan will eventually “eclipse Macau” as the world’s top casino jurisdiction, but added that there is “no need to rush in,” as the first resort may not open for eight years. “I see that as a minimum,” wrote columnist Rafi Farber. “It will likely take longer because there is no economy more bloated with dead weight in the world than Japan.”
