Bizcuits | On/off again, Japan casinos

Leanda Lee

In the latter part of the year, for the last few years, there have been storms of analysts and would-be investors in Japan’s casino IRs talking up the greatest thing in Asian gaming since Macau. “Time and time again we hear that Japan will finally pass the draft casino enabling bill through the Diet,” wrote a gaming analyst in March 2012. In September 2013 while reviewing commentary for MDT by Japanese gaming expert Takashi Kiso, I was reminded that there had been 8 years of persistent rumours and statements of the pending issue of gaming licenses in Japan. The big question back in 2013 was “Is it real this time?” Eleven years on, and Japan, with its own timeframe and shifts in politics, has made fools of those who each and every year state claim that this time there are indications that it’s about to happen. The title of my October 2014 opinion piece on the subject cautioned, “Don’t hold your breath”.

Nobody much bothered with the topic late 2015 with the 2016 mid-year upper house elections on the horizon. The casino legislation, being the political hot potato that it is, was never going to get much airing.

In 2014, MGM’s Alan Feldman suggested that Japan’s IRs would only move forward with a “confluence of political need and political will”. He stated that Japan’s political need was to increase foreign investment, tourism and drive the service economy. At the same time, he raised doubt as to whether the government had decided if casino IRs were the best way to achieve these given other options for economic stimulus. Prime Minister Abe’s announcement of a new round of spending post-election supports this.

As debate opened again on November 30 in the Lower House Cabinet Committee, a different list of IR investment advantages emerged from LDP Executive Council Chairman Hiroyuki Hosoda. Hosada had headed up the group of lawmakers who initially submitted this private members’ bill to the Diet in 2013. The outcomes he mooted on Wednesday were four-
fold: a boom in construction, more jobs, an increase in overseas visitors and tax revenue. The foreign investment topic dropping from the list is another sign of the political sensitivity of this yet, and yet to be, long-in-the-tooth bill.

Public opinion polls show opposition to casinos in Japan. Many on the pro-IR development side retort that this is due to the public being ill-informed. This, however, is Japan, a country whose citizenry is sophisticated, notoriously well informed and educated. Shifting the tide of public opinion, even with a two-thirds majority in the Diet, will be a long road for the LDP, especially as this majority gives more powers to progress with the more pressing constitutional reform.

The IR Promotion Bill was discussed Wednesday with the aim to pass the bill through the Lower House Cabinet Committee today. The next step is to put it to the Lower House plenary session on December 6 and if successful, to have the bill passed through the Upper House before the session ends on December 14. Ahead are still uncertain outcomes for a bill that sits behind other government agency bills.

The political timing appears right, however, for baby-step beginnings but will require an extended period of public discussion on the ills and the benefits of gambling, developing the IR concept and gaming policies, local resident access, gambling addiction, money laundering, and organized crime.

Regardless of the optimism by those with vested interests and those paid to have them, it is not a done deal, and even if all goes smoothly this month, not before 2023. And, this is only the promotion bill, not the implementation bill. As one analyst quipped recently, “[I] don’t know which bit of ‘majority of public don’t want casinos’ the ####s don’t understand”.