Japan Bill Delay Could Mean No Casinos Before the Olympics

Keiichi IshiiJapan’s plan to have their first casino setup in time for the 2020 Tokyo Olympics has hit another roadblock as the integrated resorts bill is likely to be pushed into 2015, much to the annoyance of casino operator’s ambitious plans to expand into Japan.

Keiichi Ishii, who is the policy chief of the Komeito party, has said the government didn’t want to fast track the bill’s passage as there are concerns among some Komeito members regarding the effects that gambling could have on society, which in turn could lead to more crime, as well as potential money laundering issues. Hence, there isn’t enough time to discuss these issues among others in the current Parliament session which ends next month.

Failing to pass the bill this year could very well mean there wouldn’t be sufficient time to open “integrated resorts” that would be completed by the Olympics, which would be a political blow for Japan’s Prime Minister Shinzo Abe.

Even prior to this last delay of the casino bill, Ishii of the Komeito party said in a statement: “The hurdle is quite high for both Lower and Upper houses to enact it,” A lot of parliamentary members who are opposing this legislation have felt the casino bill has tried to be rushed through without proper discussion of the ill effects of gambling. It’s very much a dividing issue in Japan. A national survey conducted by the Mainichi newspaper showed that 62 percent of the public opposed the bill, and only 31 percent favoured it.

Gaming companies such as Melco Crown Entertainment, MGM Resorts, Las Vegas Sands and Genting Singapore are all potential investors eager to enter the Japanese market, which is viewed as being one of the largest untapped gambling markets, said to be worth about US$15 billion a year as a conservative estimate.

James Packer’s Melco Crown Hong Kong listed joint venture has said that it will spend up to US$5 billion to build a casino complex in Japan if it secured the right to obtain a casino license. Other casino operators also have big ambitions and will make the necessary investment when and if casino gambling is legalized here.

In efforts to set the legislative process in motion, pro-casino lawmakers agreed to revise the bill by imposing limits on Japanese nationals’ entry to casinos. Proponents of this change noted that it didn’t imply that locals would be banned from entering the casino resorts, but the primary goal is to put Japan on the map as a gambling destination as a way to encourage tourism.

However, some analysts are less optimistic about the casino operators ability to survive if they were to exist as foreign-only casino resorts, as they are of the belief that Japanese nationals would likely account for the majority of Japan’s casino revenue. It goes without saying that casino operators will not be pleased with any strict limitation of locals entering the casinos, as it could have a significant impact on gambling revenues.

Prime Minister Shinzo Abe had envisioned casinos in Japan to be part of the plan that would help to provide the much needed economic boost just like it has done for other Asian gambling hotspots like Macau and Singapore. But even if the the integrated resorts bill was to pass, Japan’s pro-casino lawmakers would need to submit a second casino bill that could very likely be even harder to get approved as it would be more detailed and specific to the regulatory framework.