Abe unable to get bill through parliament
Japan’s ruling Liberal Democratic Party continues to push a stalled plan to approve casino gaming in the country. The bill was defeated in the ordinary legislative session last year, but analysts say it may finally pass sometime in 2016. Even if it does, however, operators may not have enough time to develop and open resorts for the 2020 Olympic Games.
According to the Nikkei Asian Review, Prime Minister Shinzo Abe supports the bill, but has received pushback from junior coalition partner Komeito, which has managed to hold up the legislation. Abe has urged Komeito leader Natsuo Yamaguchi to endorse the bill in the next session.
The plan has faced numerous obstacles and delays, but the government is gearing up for casinos anyway. A source who spoke to Nikkei warned that the legislation is far from complete. “The resort promotional bill was drafted by legislators and is not necessarily drawn up in full detail,” the source said. Complicating matters, three separate entities will be involved in overseeing Japanese casinos: “a regulatory agency affiliated with the cabinet office, prefectural and local administrations responsible for drafting resort plans, and certain cabinet ministers,” Nikkei reported.
With the three-tiered power structure, another source added, “Policies could change when a new prefectural governor came into office, throwing the scheme into confusion.” All those issues must be worked out before the legislation is passed and the bidding process begins.
In addition, Mikio Tanji, chairman of Gaming Capital Management, said there are still major obstacles that could prevent passage of the bill, making it uncertain that an IR site would be identified before 2019. And that’s the best-case scenario, he said. Some basics of the bill still remain unsettled, including issues of foreign ownership and whether Macau junkets will be permitted to do business in Japan (the latter is not likely, he said).
Interest remains high in the jurisdiction, where pachinko parlors have been reported to generate 19 trillion yen (US$187 billion) a year, the largest profit from any leisure activity in Japan, according to the Diplomat. U.S. operators like MGM Resorts International and Wynn Resorts have looked at Japan. And Abe’s support is also a plus. There is continuing opposition from religious circles, but those concerns may be outweighed by the sheer potential of the market. Fitch Ratings has estimated that two casino resorts in Yokohama, near Tokyo and Osaka could generate roughly $7 billion in gross gaming revenues, according to the Asia Gaming Brief. Other possible locations include the skiing destination of Hokkaido and Nagasaki, home of the Huis Ten Bosch resort.
According to a recent study on the matter cited by Kasuaki Sasaki, assistant professor at Nihon University College of Economics’ Gaming Academy, an integrated resort in Yokohama could be worth 414.4 billion yen (US$3.36 billion) to the local economy, and create more than 41,000 jobs.