Abe supports legalization
Despite many promising starts and discouraging setbacks, the time may be right for Japan to finally make the leap into legal gaming. Why? A recent change in the country’s political environment has given stalled casino legislation a 50 percent chance of being passed.
For the first time in more than a quarter century, the country’s ruling Liberal Democratic Party LDP holds a majority in both houses of government. The LDP now a slight edge—50 percent of the total vote, plus one new member—to put this one in the win column. Historically, the LDP has faced off on the issue of gaming with the Komeito party as well as religious leaders.
Japanese Prime Minister Shinzo Abe is a longtime proponent of gaming as part of his economic growth strategy, popularly known as “Abenomics.” The sea change could mean quick movement on the issue, said Union Gaming analyst Grant Govertsen in a note.
“While earlier this year we would have assigned a very low probability to the passage of the IR bill, the change in political fortunes of the LDP necessitate a change in our view, and we would currently assess the odds at better than 50/50 when contemplating the fall of 2016 or spring 2017 legislative sessions,” Govertsen wrote.
The legalization of casinos in Japan would be a two-step process. An enabling bill would permit casino resorts. An implementation law would include the specifics, including how the resorts are administered and regulated. According to CalvinAyre.com, it’s now up to the Japanese parliament or Diet to make a move in favor of legal gaming. The earliest an integrated resort is likely to open would be in 2022, Govertsen predicted. If the IR bill passes, Japan might consider two licenses to start, one for metropolitan Tokyo and another for Osaka, while licenses for smaller locations such as Hokkaido could be issued “at some later date,” the analyst added.
The two major contenders for these “mega-licenses” would be local firms Sega Sammy and Universal Entertainment, reported the World Casino Directory. Sega Sammy is currently developing Paradise City in Incheon, South Korea while Japanese billionaire Kazuo Okada’s Universal Entertainment is developing the Okada Manila resort in the Philippines’ Entertainment City district.
WCD predicts other big players could jump on the bandwagon once gaming is legalized.“We also expect the usual players to have a seat at the table, including most of Macau’s ‘Big Six’ and Genting Singapore,” wrote Govertsen, referring to Macau’s six casino concessionaires and Genting Singapore Plc, developer and operator of the Resorts World Sentosa.
“We would speculate that international gaming companies might end up participating in Japanese gaming expansion via minority stakes in any projects that have development costs in excess of US$10 billion,” Govertsen added.
