Japan’s IR period will continue. An industry analyst told the media that the results of Sunday’s inconclusive snap national election in Japan, which harmed the typically powerful Liberal Democratic Party, could cloud the future of any future casino-resort licensing process. Another seasoned observer believed that the future for integrated resorts (IRs) with casinos as a sector in Japan would not be much affected by the current political upheaval.
Only Osaka City and Prefecture have been granted the ability to host an IR thus far in a liberalization process that has lasted more than ten years. Involving MGM Resorts International and Orix Corp., the JPY1.27-trillion (approximately US$8.28-billion) MGM Osaka is scheduled to open in 2030.
The LDP, the primary supporter of the IR policy, and Komeito, its coalition partner, were unable to secure a majority in the nation’s lower house of parliament on Sunday. The coalition fell short of the required 233 seats in the lower house, which has 465 MPs, by securing 215 seats. Since 2009, the bloc had maintained its majority there.
See also:
- MGM Cotai converts 160 rooms to about 60 suites: Feng
- Las Vegas Q4 GGR Unlikely to Surprise on the Upside Amid Tough Comps
- Caesars finish $500 million WSOP sale to GGPoker
Daniel Cheng, a veteran casino executive and industry analyst, informed GGRAsia about IRs: “An absolute, stable majority government with strong leadership is essential for propagating policies, legislating and expanding this sector.”
“In this regard, the Japanese political climate has been spiralling downward for many years since the end of Shinzo Abe’s tenure, and it is now near rock bottom following last weekend’s election results,” he mentioned.
“Consequently, the stagnation over the two undispensed IR licences is likely to continue,” Mr Cheng added.
That was an allusion to the fact that, under the announced liberalization, the authorities could have granted up to three licenses. Only two communities ultimately submitted applications, and Nagasaki’s plan was rejected at the national level.
The book “Japan Casino Uprising,” written by Mr. Cheng, details the nation’s convoluted journey toward casino liberalization.
Japanese academic Toru Mihara told GGRAsia “Political confusion may continue for the time being but this may not impact IR [policy].”
The scholar, who is in charge of the National Council on Gaming Legislation, also stated “It is unlikely that [national] government or [a] political party will… influence… the remaining two slots for IR [licences]. I discussed personally with the commissioner [of the Japan Tourism Agency] who clearly declares that it is up to the local governments… If they are willing” to host an IR, “the door is always open.”
“The real question may be whether the local governments have such strong willingness to promote IR [policy],” Mr Mihara commented.
Mr. Cheng said: “Orix/MGM can count their lucky stars that the Osaka government managed to secure its [IR] licence before the [country’s] political situation worsened.“
“Without an LDP government wielding carte blanche powers – or worse, the emergence of a new CDP [Constitutional Democratic Party] coalition government – the Osaka consortium will be concerned about stricter controls and oversight on their project construction, along with potential tightening of regulatory policies in areas such as social safeguards, security, and financial controls in their business operations,” commented Mr Cheng.
He mentioned: “The Japan Casino Regulatory Commission is unlikely to conduct any additional IR licence tenders without receiving implicit approval from the political leadership, which is unlikely to occur amid the current domestic political flux — a situation that is likely to persist for many years until another Abe-type LDP government comes to power.”
Mr Mihara suggested that there were “high investment hurdles” facing investors, and that under current national guidelines they were obliged to operate “huge MICE facilities”. This was an allusion to their non-gaming operations, which include meeting spaces, incentives, conferences, and exhibitions.
Mr Mihara commented: “…not all prefectures want to have huge exposition facilities which make investment costs very expensive.”
As this subject was “politically contentious,” Mr. Mihara added, it is also politically difficult for local governors in Japan to agree to host an IR.
The researcher said: “Look at the failure of Nagasaki prefecture and Yokohama city – they’ve been promoting IR for more than a decade, spending huge money and manpower, but lost everything. The cost to promote IR is very high… this is another hurdle that every local government is hesitating to raise their hand.”
After attracting attention from large operators and expressing interest in hosting an IR, Yokohama ultimately decided in September 2021 not to request approval from the national authorities.
Join us on all our social channels and groups
Gameongazette is present on:
