Analysts: Delay could be a good thing
News that Japan may push implementation of the country’s Integrated Resorts bill to 2018 should come as no surprise to the gaming industry, says Toru Mihara, a professor and advisor to the government’s expert committee on casinos.
“Nobody has mentioned to pass the bill during 2017,” Mihara told the Macau Business Daily. “It’s just markets’ anticipation without reason.”
With so much emphasis on the measures related to problem gambling, Mihara said, there was “no practical time” to fully debate the bill this year. He added that “action to present the bill” would only happen during the 2018 Diet session.
Last month, Japan’s Prime Minister Shinzo Abe called for a snap election to take place in October. That move was interpreted by some as a political move to delay the implementation of the IR bill. Mihara dismissed that speculation, saying it wasn’t about the IR bill alone, but “all other important bills.”
“The delay will not affect the casino project as a whole,” observed Tokyo journalist Yasuhiro Idei, “as the Diet already passed the promotion bill” in December 2016.
The delay could be a good thing, said Grant Govertsen of Union Gaming Asia Securities Ltd. “With the Liberal Democratic Party voting as a block, it would appear that there should be greater support for the IR bill in the 2018 legislative session, assuming Abe’s political instincts are right and his LDP party does, indeed, gain more seats,” Govertsen told the Business Daily. “If the bill is done right I don’t think any of the potential license holders are going to complain too much if the bill doesn’t get passed until next summer.”
He added that lawmakers “need to fix the bill if they’re hoping to attract the world’s leading IR operators,” a list that has included Wynn Resorts, Melco Entertainment, the Las Vegas Sands Corp., Hard Rock International, Galaxy Entertainment and MGM Resorts International. Some operators have worried that the regulatory framework would be too “restrictive,” with punitive limits on casino square footage and entry fees that could keep away local gamblers. Such regulations could make big operators hesitate before investing billions in the market.
Sanford C. Bernstein analysts Vitaly Umansky, Zhen Gong and Cathy Huang agree that a delay in passing the IR bill may be beneficial “if it allows all sides to reevaluate the most recently discussed proposals that would have a negative effect on market potential.”
And Ben Lee, managing partner of gaming consultancy IGamiX, said the operators should pitch in too, using the extra time to come up with “elegant solutions” for the nascent industry.
“The proponents have engaged in megaphone high-pressure sales tactics more common to the West when they should have engaged in more tactful diplomacy,” he said.
According to GamblingInsider.com, Abe’s popularity has soared amid nationwide unease about tensions with North Korea. Abe reportedly sees an advantage to consolidating his power now, through the snap election.
