Nagasaki Prefecture is seeking detailed information on the central government’s decision to decline its application for an integrated resort (IR) with gaming.
According to GGRAsia, the prefecture has sent an inquiry to the Japan Tourism Agency to determine if it can be successful in a second go-round.
Last week, at a meeting of the Nagasaki Prefectural Assembly, four of seven members told Governor Kengo Oisihi they want to continue to push for an IR in the vicinity as a way to boost tourism.
On January 12, the prefecture sent a questionnaire to tourism officials, asking how they “examined and evaluated the plan.” In a statement, the prefecture said it “will look into the response of the agency and review all the processes the prefecture has taken … (then) … decide whether to keep going on with the IR (bid) or not.
“At this moment, the governor thinks that the IR policy takes a lot of effort, money and time and he has to be cautious in making a decision,” the statement continued.
The Tourism Agency is part of Japan’s Ministry of Land, Infrastructure, Transport and Tourism. When it declined the original application on December 27, it left the door open for a new proposal during the next application window, but did not say when that window would open.
In its current application, Nagasaki’s IR Promotion Division described its plan to build a JPY438.3 billion (US$2.96 billion) IR near Huis ten Bosch theme park in Sasebo City. Its private-sector partners were Casinos Austria International Japan and Kyushu Resorts Japan. Central government authorities questioned the stability of the IR funding, 60 percent of which was to be covered by bank loans. Concerns were heightened after the March 2023 collapse of Swiss financial giant Credit Suisse, which was involved in the project fundraising.
The Ministry of Land, Infrastructure, Transport and Tourism confirmed that tourism and economic experts pointed to the lack of “objective materials supporting the certainty of financing” for the IR.
The panel of experts released a report stating, “We cannot eliminate the concern that the parties scheduled to invest/finance may continue to change in the future.”
Panelists were also skeptical about the investors’ operational ability, noting that only Casinos Austria International (CAI), which led the Kyushu Resorts Japan consortium, had experience in the industry, and CAI was expected to play a minor role in the project.
“Although CAI has a track record and know-how in developing and operating casino facilities, we cannot fully confirm (the rest of the consortium’s) track record in installing and operating IRs,” the panel wrote. “Furthermore, as (CAI’s) investment ratio is extremely small and the level of commitment is not sufficient, it is difficult to say that CAI’s capital involvement in the IR business is sufficient.
The report continued, “Casinos must be operated and measures to eliminate harmful effects must be appropriately implemented … (T)here is insufficient evidence to expect the IR business, including casinos, will be carried out appropriately and continuously.
“Most of the investment will come from investment companies … and profits from the casino business will be utilized. Concerns cannot be dispelled as to whether priority should be given to returning profits to investors or taking measures to return profits to the IR business and eliminate the harmful influence of casinos.”
But in its statement last week, Nagasaki countered, “The prefecture has consulted with financial institutions with IR finance experience and (with) advisors. The prefecture considers that their plans of consortium-building and fundraising are in line with international business standards.”
