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Japan Open for Bets on Hosting Mega Casino Resorts

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Japan Open for Bets on Hosting Mega Casino Resorts

Since the legalization of casinos in Japan, the battle to attract global casino operators continues amidst divided residents and business communities.

Japan Open for Bets on Hosting Mega Casino Resorts
Credit: Flickr / Herry Lawford

It’s surprising to find out that while horse racing, the lottery, and slot machines are a part of daily life in Japan, casino gaming is illegal. The unmissable, brightly lit, Pachinko Japanese-style slot machines operate under a niche zone of recreational arcade games for adults. It’s not officially viewed as gambling.

But last year Japan ended its ban on gambling by introducing the controversial “integrated resort promotion law” welcoming bids from top global casino companies to advance into the Japanese market. Initially, the bill will accredit gaming licenses to three locations with expectations that integrated resort mega facilities will be completed by the mid-2020s. Currently, Osaka city, Yokohama city, Nagasaki, and Wakayama prefecture have entered the race, aggressively rallying for investors. Also considering joining the race is Tokyo city as well as Chiba, Aichi, and Hokkaido prefectures.

For the first time in history, the government is hoping to kickstart a new industry of large scale Japanese style “integrated tourist resorts.” The term “integration resort” refers to a multipurpose facility that comprises of a casino, hotel, conference halls, and shopping centers. The bill’s success in the lower and upper house came after the emphasis on how tightly the industry would be regulated.

A four-member casino administration committee has been tasked to monitor integrated resort licensing requirements and ease public concern over the possible negative social impacts such as gambling addiction. The casino area will be limited to 3 percent of the total floor area of the facility and measures will need to be taken to prevent addiction such as limiting the number of admissions by locals.

International visitors are entitled to free entry, but local residents will be charged $50 and restricted to three visits per week. The casino admission fee collected by venues will be split between the government and prefectural councils. Community groups have also voiced concerns about the impact of casinos on young people, on crime and the potential for worsening political security and money laundering by local and foreign underworld crime gangs.

The push to secure casino resorts is in part aimed at preventing economic slowdown after the Tokyo 2020 Olympics. Integrated resorts are expected to bring significant economic benefits such as tax revenue, job creation, tourism promotion, and regional revitalization. The economic success of two such resorts in Singapore in 2010 helped Japan set casino goals and a foundation for regulation planning. 

Yohokama, the second largest city in Japan, announced “full-scale preparations” to attract resort partners and win a highly competitive license. However existing businesses surrounding the proposed site have grouped in opposition to gambling. Yokohama Mayor Fumiko Hayashi announced at a press conference that the decision to attract integrated resorts was made with “thoughtful judgment and different stakeholder opinions” but emphasized the dismal population statistics facing the city. 

The central government has released a rough draft for evaluating candidates based on a location’s ability to attract the most overseas visitors. Other core requirements include maintaining “good relations” with locals, countermeasures against gambling, the financial records and international competitiveness of resort partners and access to the city. A basic policy for selection will be announced early next year once public hearings concluded in early October and an application deadline has not been set at this stage. 

Japan’s budding gambling market is the latest frontier in the industry as a fresh gaming hotspot. Hong Kong’s Mercury Resorts is expected to open an office in Yokohama, in order to start “full-scale preparations” to win a license. However, the move to recruit major resort operators hasn’t taken off as originally hoped.  

In the one year since the approval of integrated resorts, there have been major disappointments with the withdrawal of potential investors. Initially, U.S.-based casino operator, Caesars Entertainment announced plans to develop resorts in Tokyo, Yokohama, and Hokkaido in 2018, expressing an intention to create an integrated resort that is a “symbol of pride for the Japanese.” But, last week the company pulled out of the race and abandoned the Japanese market altogether due to the “sensitivity of the issue.”