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Japan – Japanese government’s advisers suggest two-phase licence introduction

By - 22 May 2017

Members of the Japanese government panel currently debating casino legislation have advised that licenses should be awarded to two to three municipalities to develop the first casino resorts in Japan with a second round of casino licences to be awarded later on.

Several of the big US casino giants eyeing up opportunities in Japan have already said they need to be in major cities with Tokyo, Osaka and Yokohama emerging as their favoured destinations.

Marina Bay Sands CEO George Tanasijevich said: “The location that works best for our business model is the major cities so we’re talking about Tokyo, Yokohama, Osaka.We need to be in a major city that’s connected to a major international airport so we can bring in the millions of people that we want to host at our property.”

Ed Bowers, VP of global development for MGM Resorts, said: “MGM’s business model is to build large-scale destination resorts with lots of stuff that cost a lot of money. So it needs to be in a high density population area, and obviously the ones to be mentioned are Tokyo, Osaka and Yokohama. So we’re focused on those three.”

Steven Tight, President of international development for Caesars Entertainment, said, however: “We are currently exploring opportunities in both urban and regional markets.”

There are 47 prefectures in Japan. Consulting group Global Market Advisors highlighted Osaka, Tokyo and Yokohama as potential host cities for large-scale integrated resorts; and Sasebo, Fukuoka, Hokkaido, Sendai and Wakayama for regional casino resorts.

“One of the biggest discussion points will be the number of locations,” GMA said. “While there is no definitive number that has been determined, most discussions have the initial round of integrated resorts between one to three locations. If there were to be a second round, with the first ‘pilot’ round serving as a true test, one may see an expansion between that to maybe six locations. However, it is viewed that if this were to happen, the second round would not occur until a few years after the first round of integrated resorts had been operational.”

Sasebo is located to the north-northwest of Nagasaki, which offers the closest international airport. As one of two sites close to South Korea, it has a strong tourist reach.

Located on the western coast of Japan, Fukuoka also sits close to South Korea on the island of Kyushu. It is the fifth largest city in Japan and the largest in the region.

On the northern most island of Japan, Hokkaido has several sites in discussion. The main airport in Chitose serves the island, which is located outside of the capital city of Sapporo.

Sendai is located on the Pacific Ocean and is the capital of the Miyagi Prefecture. There are two sites in current discussion, near the airport in Natori and Iwanuma.

Finally, Wakayama City is the capital of the Wakayama Prefecture that is located to the south of the Osaka Prefecture. While the prefecture itself is mostly rural, Wakayama sits on Wakaura Bay.

Some prefectures have criticised the Japanese government’s new bidding framework, claiming it is at odds with Prime Minister Shinzo Abe’s aim of providing an economic boost to rural areas.

“The guidelines have changed the power structure between operators and local governments,” Yoshinobu Nisaka, Governor of Wakayama prefecture said. “Where did the view that this was for local revitalisation go?”

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