As Japan ramps up preparations for a legal integrated resort (IR) industry, with bidding to begin early this year, a Japanese lawmaker deeply involved in the process has been arrested for allegedly taking bribes from a Chinese online sports lottery provider.
On Christmas Day, Tokyo law enforcers detained Tsukasa Akimoto on charges that the Liberal Democratic Party member accepted cash and gifts from 500.com.
According to the Nikkei Asian Review, 500.com set up a Japanese subsidiary in 2017 in hopes of winning at least one IR license in Japan, and targeted Hokkaido as one of the locations.
Prosecutors allege that in September 2017, an adviser to 500.com visited Akimoto’s office and handed over a paper bag containing JPY3 million (US$27,000). Akimoto was serving at that time in the cabinet and was in charge of IR policymaking, reported Asia Gaming Brief.
Complicating matters for Akimoto, the Japan Times reported that in a possible violation of the Political Funds Control Law, his private political office may have diverted money from a Tokyo-based consultancy to pay the salaries of his private secretaries.
AGB reported that Akimoto “gained national prominence in December 2016,” when he “railroaded IR legislation through a House of Representatives committee over the shouting and objections of opposition lawmakers.” For more than a year between 2017 and 2018, Akimoto oversaw casino resort policy, and also belongs to a bipartisan parliamentary group promoting IRs.
The offices of two other ruling party figures also were raided. Takaki Shirasuka, a current lawmaker, as well as former lawmaker Shigeaki Katsunuma accompanied Akimoto when he visited 500.com’s headquarters in Shenzhen in 2017. In addition, Reuters reports that federal authorities raided the headquarters of a pachinko operator as part of the bribery investigation. Prosecutors have not named the company.
Before the Christmas day raid of his office, Akimoto went on the defensive, saying on Twitter, “I apologize for making people worry about my situation, but I am not involved in any wrongdoing and I will stand by this statement.”
He also telephoned a Mainichi Shinbun reporter and said, “I wouldn’t take such a small amount of money. It can’t be true. They’re such idiots.”
In the wake of the arrest, 500.com Chairman Xudong Chen resigned and CEO Zhengming Pan temporarily stepped down. Chen will be replaced by Shungwu Wu, and Chief Technology Officer Zhaofu Tian will serve as interim CEO as the probe continues.
Nikkei described 500.com as “an online lottery pioneer” in China, founded by Man San Law, or Luo Zhaoxing, as he’s known in mainland China. It first launched a gaming website in 2001, and Law was the company’s controlling shareholder, chairman and CEO when the company listed in New York in November 2013.
In January 2015, Chinese cracked down on online lotteries, and in May of that year, Law resigned as CEO, after the company posted its first quarterly loss after listing. Since then, 500.com has posted 19 consecutive quarterly net losses. In its official earnings disclosure, 500.com stated that it “does not expect to issue any earnings forecast until it receives clear instructions as to the resumption date of online sports lottery sales from the Ministry of Finance.”
The Japan government insists Akimoto’s arrest will not interrupt its IR plans, but that may be a best-case view, as the investigation is likely to cast doubts on the bidding process. The majority of Japanese residents have expressed opposition to legal gaming because of concerns about gambling addiction. In 2014, the Japanese Ministry of Health, Labor and Welfare reported that 5.36 million people in Japan—or about 5 percent of the adult population—struggle with problem gambling.
Meanwhile, according to the Las Vegas Review-Journal, in December former Nevada Gaming Control Board chairwoman Becky Harris spent five days in Japan, meeting with IR promotion officials in Osaka and Tokyo to share her insights about gaming regulations.
“Japan is still working on creating their regulatory environment, so there’s a lot of speculation as to what that could look like,” Harris said. “One of the models that Japan is looking at is Nevada, so there were some questions about the way that Nevada regulations work.”
She traveled with Cooper Levenson attorney Scott Rasmussen, who told the Review-Journal that Japan is looking to Nevada as a model as it prepares to finalize its own regulations. “Our industry is very transparent. … It has the longest history in casino regulations, it has shown a propensity for doing and taking very hard stances at times where it’s needed,” he said.
In other Japan news, coordinators of the 2025 World Expo have advised the Osaka regional government that it does not support a plan to rush an IR in the area so it will be open in time for the six-month event, to be held on Osaka’s Yumeshima Island. Osaka Governor Hirofumi Yoshimura has said he was in favor of opening a resort ahead of the expo, saying, “An extravagant grand opening of an integrated resort right next to the expo site is undesirable. I think it’s all right to open such a resort before the expo.” But in a December press conference, Osaka Mayor Ichiro has backpedaled on its intention to hurry the complex, multibillion-dollar project.
In Hokkaido, meanwhile, business groups told Inside Asian Gaming that they have not yet given up on their dream of hosting an integrated resort, despite Governor Naomichi Suzuki’s decision last month that the island would not pursue an IR bid.
In a statement, the Tomakomai Chamber of Commerce and Industry told IAG, “This is a great disappointment. Discussions about an IR have been neglected at the final stage and have been used only as a political tool at the Hokkaido Assembly level.
“This outcome is very disappointing, but we have not given up on an IR and we want to continue with the project.”
Chairman Akihiko Mayumi of the Hokkaido Economic Federation, who submitted a formal request for Hokkaido to pursue an early bid, offered similar sentiments.
“This is a terrible shame,” he said. “For Hokkaido, an IR was considered to be a project that would lead to an explosion for the food and tourism industries. Eight organizations, including my own, have made requests to the governor and we have made progress by establishing ventures such as the Thinking About Hokkaido IR Group. When I consider the economic ripple effects we expected for the Hokkaido economy being lost, I feel a lot of pain.”
GGRAsia reports that the national government has earmarked JPY6.4 billion (US$58.4 million) to set up its casino management commission, which will begin operating this year.
