Is Yokohama turning thumbs down?
The Japanese government has announced it will establish a “casino administration committee” to oversee regulations, licensing, probity and background checks related to the budding industry. It will not be in involved in routine oversight of gaming matters, however, according to GGRAsia.
The publication reported that the government will spend JPY6 billion (US$53.7 million) to establish the body, but it was unclear if that figure is a one-time expense or an annual operating cost. The body, an external bureau of the Cabinet Office, will launch with a staff of 95 by July 1, 2019.
“The Japanese bureaucracy has to build everything from scratch,” gaming consultant Masa Suganuma told Inside Asian Gaming. “Establishing technical standards is one of the most important tasks the bureaucracy has to start ASAP, since it is deeply related with responsible gaming.”
Last month, Japan’s Office of Integrated Resort Regime Promotion welcomed officials from some 40 local governments interested in hosting one of the first three integrated resorts in the country. Though certainly not all will enter the race, the number of participating officials reportedly surprised lawmakers.
But questions continue to swirl around Yokohama, which has been mentioned often as a likely contender for an IR, along with Tokyo and Osaka. In a new government survey, fully 94 percent of respondents in Yokohama City—Japan’s second most populous urban center—came out against casinos. And Mayor Fumiko Hayashi, once an outspoken advocate for IRs, has retreated from her former position. She now insists she is a “blank slate” on the matter.
“I will listen to the ideas of the experts,” Hayashi has said, “and then make an extremely calm decision.”
Rumblings of discord have been heard elsewhere, too. According to CDC Gaming Reports, a total of 72 companies sent representatives to two RFI briefings held by the Aichi prefectural government in August, related to the development of an international airport in Tokoname City. But government officials there stressed that they do not support Nagoya Mayor Takashi Kawamura’s interest in an IR bid.
In a statement quoted by AGPNippon.com, the officials said, “The mayor made his statements abruptly and his own city administrators are perplexed. Also, since it is difficult to secure the necessary land within Nagoya City, we view his idea as impractical.”
But other municipalities seem to be champing at the bit to get the economic shot in the arm that an integrated resort could provide. The Wakayama prefectural government has established an eight-member team to work full-time to bring an IR to its Marina City location. The prefectural government of Hokkaido in northern Japan also is mulling possible locations, though it hasn’t yet fully committed itself to being a host community.
Meanwhile, the world’s leading operators are looking to be first in line in Japan, where the gaming industry could eventually be worth up to $20 billion a year. Likely suitors include the Las Vegas Sands Corp., Melco Resorts and Entertainment, NagaCorp, Genting, Galaxy Entertainment Group, Hard Rock International, Mohegan Gaming, MGM Resorts International, Caesars Entertainment and others.
Most estimates say the first IRs will not open in Japan until 2025. Through the coming stages, “local Japanese governments, Japanese corporates and casino operators will be working to form consortia, based on shared visions for the IRs and comfort with each member’s leadership teams, among other factors,” said CLSA Senior Analyst Jay Defibaugh.
“Now that we have a real law, everything we do on a daily basis has real consequences,” observed MGM Japan CEO Ed Bowers, who added that his company has “only one request” for the government. “In developing the detailed regulations, allow for a proper period of consultation from industry experts and operators before approving specific regulations. Providing an opportunity to operators and experts to comment on specific regulations will avoid many adverse unintended consequences in the future practice of those regulations.”
Bowers may have been alluding to speculation that VIP junkets will not be permitted to operate in the market, which could constrain the high-roller action in Japan. In fact, Toru Mihara, adviser to the Japanese government on IRs, said as much when he noted, “Casino activities (will be) allowed only for licensed operators and cannot be entrusted to any third entity, including credit to patrons.”
Mihara, a faculty member at the Osaka University of Commerce’s Institute of Amusement Studies, advised would-be Japan operators to “look seriously at the law and decrees—not everybody has read or understood the entire version of the legal text—verify constraints and issues, and re-conduct business feasibility studies in detail with more precise evaluation on potential market.”
