Japan Approves Casino Regulations, Major Operators put in Their Bids
Despite widespread public opposition, the Japanese parliament has finalized the last round of regulations needed to put a 2016 casino gambling legalization bill into effect.
The approval granted on July 20 calls for up to three casino licenses to be awarded, with the trio of so-called integrated resorts forced to cap casino floor space at just three percent of each property’s total size. The eventual operators of the three resorts – which aren’t expected to receive licenses until 2020 – will pay a 30 percent tax on gaming revenue.
With that red tape finally ironed out following nearly 18 months of legal wrangling, the Japanese government has officially extended an invitation for major worldwide casino operators to submit project bids.
And that bidding is expected to escalate into an all-out war, especially given the rosy economic estimates for a mature Japanese gaming market. In a note to investors published by Morningstar Research last year, the analysts estimated that Japan’s casino industry could be worth $21 billion by the middle of the next decade. That market share would immediately make Japan the second-largest gaming market in all of Asia, trailing only the Chinese-controlled territory of Macau ($33 billion).
Among the major casino corporations already making their interest in Japan clear are American firms like Wynn Resorts, Las Vegas Sands, and Caesars Entertainment, along with the Chinese-based Melco Resorts and Entertainment
Matt Maddox – who serves as chief executive officer for Wynn Resorts – issued a statement confirming the company’s intention to bid shortly after the parliamentary approval was made public:
“Wynn Resorts consistently offers the finest, one-of-a-kind guest experiences in the countries in which we operate, experiences which both embrace and celebrate local culture.
We plan to do the same in Japan if afforded the opportunity.”
Sheldon Adelson, the controversial chairman and chief executive of Las Vegas Sands, used an earnings call to tell shareholders about the company’s plans for Japan:
“We hope to be able to bring our track record, expertise, and development vision together with our industry-leading financial strength to deliver a large-scale MICE-based integrated resort that would be uniquely tailored to the Japanese market.”
Caesars Entertainment chief executive officer Mark Frissora issued his own statement seeking the partnership of Japanese gaming companies:
“The passage of the legislative framework propels the race for licenses in Japan into the next phase.
As we prepare to bid, we are seeking the most creative and respected Japanese partners to help us bring to life an unparalleled integrated resort experience.”
Lawrence Ho Yau Lung, the chairman and chief executive of Melco Resorts and Entertainment, said:
“Japan continues to be a core focus for us.
We expect development of the next generation of integrated resorts to soon commence in this incredibly exciting, yet currently under-penetrated, tourism destination.
We believe we are well placed in Japan with a strong local team actively working on the ground, engaging with the relevant stakeholders.”
But while foreign corporations are keen on entering Japan’s emerging gaming sector, local lawmakers and citizens alike are largely ambivalent or opposed to the move.
When the original casino legalization bill was authorized in late 2016, Japan’s public broadcasting outlet NHK conducted a poll revealing 44 percent of the country opposed casino gambling, while only 12 percent supported them.
Three cities – Osaka, Wakayama and Yokohama – have emerged as possible candidates for casino resorts.
According to Seth Sulkin – who serves as chairman of the integrated resorts task force supervised by the American Chamber of Commerce in Japan – Osaka stands out as the frontrunner in that regard:
“Osaka is the only location where everything is clear: it will move forward immediately.”