The long-awaited Japanese Integrated Resorts Promotion Bill, which would pry open the country to gaming investors and possibly transform Japan into one of the biggest gaming destinations in the world, is looking increasingly likely to be passed in the near future as casino investors put their other overseas plans on hold.
Several of the world’s largest gaming operators are positioning to enter Japan. MGM’s chief executive officer, Jim Murren, has indicated that MGM would consider spending as much as USD9.5 billion on an “integrated resort,” combining gambling, shopping and event-hosting capabilities. Las Vegas Sands and Melco Crown Entertainment have signaled that they too are willing to invest billions of U.S. dollars in the country.
And while Bloomberry Resorts and Singapore-based Genting Singapore have both announced that they are selling their respective stakes in their South Korean ventures in preparation, the trigger-happy investors will need to wait at least a little longer for Tokyo’s green light.
The confidence of gaming operators in Japan is a sign that the passing of the legislation may be drawing nearer, even if it yet to be approved. The bill, which would legalize gambling in Japan, has been in the works at various stages from lobbying to drafting for more than a decade.
The recent surge of confidence is due to a confluence of factors in Japan’s political system. In the summer, Prime Minister Shinzo Abe secured a majority in the Japanese legislature for his ruling Liberal Democratic Party, making redundant the need for a coalition with the Buddhist Komeito party as in previous years.
Without Komeito’s opposition to gambling, the Liberal Democrats are now – in theory – able to push through the legislation, which could open a market that research group CLSA values at $40 billion.
Later in August, Abe promoted three pro-casino officials to senior positions within his party, hinting that another push is on the way.
Analysts believe that if the bill is passed shortly, resorts could start springing up in Tokyo, Osaka or Yokohama in the next five or six years. For example, MGM’s Jim Murren has forecast that the first resorts could open by 2023.
With a market valued at $40 billion, Japan’s casino market would easily outstrip Macau’s sunken sector, which recorded less than $29 billion in 2015. Even if Macau were able to regain the $45 billion in gross gaming revenue at its height in 2013, the market entry of Japan would nonetheless mean major competition.
Moreover, with structural constraints posed by Chinese President Xi Jinping’s anti-corruption campaign and efforts to reduce the MSAR’s economic dependence on gaming revenue, Japan might be poised to take the lead.
That is to say nothing of Japan’s potential power to draw away proximal gamblers who might otherwise spend their cash in Macau.
No Comments