Once again, the subject that was dead and buried has risen. Gaming in Japan is not only a possibility again, but could arise front and center in the administration of Prime Minister Shinzo Abe. When the smoke cleared from last week’s elections, Abe was the clear winner. His Liberal Democratic Party (LDP) won all the seats needed for a two-thirds majority in the House of Councillors, the upper house in the Japanese legislature, the Diet. He no longer needs to placate smaller partner parties to get his agenda passed. The LDP already holds a significant edge in the House of Representatives, the lower house.
This is good news for gaming, according to a report by the Union Gaming Group. Abe is a big supporter of integrated resorts (IRs) for Japan, the analyst Grant Govertson says his contacts tell him that things look good, who says the only question is Abe’s plan.
“With the LDP able to pass simple legislation at will, the only thing holding back the IR bill would be where it lands on the priority ladder,” Govertson writes in a note to investors.
The biggest issue is a nation defense bill that requires a constitutional amendment. If that goes forward, experts expect that the IR bill could be approved. But earlier plans to approve two IRs in Tokyo and Osaka, and then allow smaller resorts in one or two other cities, is apparently changing. Now, only the Tokyo and Osaka IRs would be approved with no conditions for further gaming expansion, although that might be possible at some later date.
In addition to changes in the structure, the players may also change to feature two Japanese companies relatively new to the gaming industry, but deeply involved with the country’s pachinko business, the leading gambling activity in Japan.
Most gaming observers know Kazuo Okada, the owner of Universal Entertainment and a former partner in Wynn Resorts, with which he has ongoing litigation about his removal as a board member. Okada last week announced his Manila development would be named after him, Okada Manila, when it opens late this year. And Sega Sammy, a pachinko manufacturer and gaming machine developer, is ready to open Paradise City in South Korea’s Incheon by 2017. Govertson says both will have a seat at the table in any bidding process for Japanese IRs, along with the “Big 6” from Macau. He says that international casino operators may wind up as minority partners in Japanese IRs that will cost north of $10 billion.
Union Gaming gives odds on Japanese IRs as 50-50 in light of the new Abe domination of the Diet.
