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Japan – Casino bill back in Diet discussion but doubtful for pre-Olympics

By - 20 February 2015

Japanese lawmakers are expected to present a bill to legalise casino-style gaming during the current Diet session although the prospects for a casino opening in time for the 2020 Olympics remains extremely doubtful.

The current Japanese Diet session began on January 26 and will run until June 24. Prime Minister Shinzo Abe is expected to discuss over 70 bills.

Whilst a pre-Olympic casino looks doubtful, the emerging favourites to host the first casinos are now Osaka and Yokohama.

Over 20 Japanese municipalities have expressed interest in casino resorts but political backing seems strongest in Osaka and Yokohama. Officials in Osaka have set up a joint committee to discuss the specifics of bringing a gambling resort to the man-made island of Yumeshima in Osaka Bay.

The 2015 budget has reserved money to continue this research. Governor Ichiro Matsui still wants to open a casino by 2020.

“The Tokyo Olympics will bring lots of people around the world to Japan, and, along with an integrated resort, all of Osaka wants to have something for them,” Governor Matsui said.

In Yokohama, Mayor Fumiko Hayashi has also continued with budget founded research into casinos with land close to Yamashita Park is the preferred location.

Takashi Kiso, CEO of the Tokyo-based International Casino Institute, said legislation is still a long way off.

“The only way an IR will open (by 2020) is if the government allows it to partially open before the Olympic games,” he explained. “The annexed document of the IR promotional bill indicated the government would develop qualifications for areas of IR development after the promotional bill is enacted. Moreover, the location will be selected through a bidding process among local governments.”
Legalization of casinos in Japan will certainly be one of the hot topics during the 150-day session.
Meanwhile, it was reported that Yokohama and Osaka will probably be the first Japanese cities where luxurious integrated resorts featuring casinos are to be built.

Union Gaming Group said: “We are less convinced that the opening of casinos in Tokyo and Osaka would be the right move out of the gate, as those markets do not fit the original reasoning behind the push to legalise casinos in Japan, to spur economic development by encouraging tourism in under-visited regions of Japan. Japan has no shortage of domestic or international tourists to Tokyo or Osaka. Commonly referred to as the ‘Golden Route,’ the route between the cities is taken by more than 90 percent of all tourists to Japan.”

“Those active in the sector for a while will know that Japan seems like a market that is always about to happen but never does. With this in mind, one thing is absolute: casino legislation has never made it this far in Japan. Politically and economically, the setting is probably as good as it will ever get in Japan – a political environment that is notoriously unstable. Our contacts suggest that although the first phase of a bill to legalise gaming in Japan would probably not pass until late 2015, we believe the decision by which operators will be blessed for certain markets will have already been decided by then.”

Union Gaming added: “Early in the process, Las Vegas Sands appeared to have a strong preference to operate independently. It appears clear to us that a local partner would be a requirement at this point for any developer expecting to win a casino licence in Japan. Not surprisingly, Las Vegas Sands has recently softened its tone regarding its willingness to take on a Japanese partner, though we believe the company’s history of making such selections and cooperation would make for a more tenuous process, particularly as its strong liquidity position suggests that it would take on a partner only if required to do so by legislation.”

In other news, Israeli Prime Minister Benjamin Netanyahu is reported to have spoken to a senior Japanese official last year, urging him to allow his financial backer Sheldon Adelson operate in Japan. The Prime Minister’s Office issued a statement denying the report, however reports suggest that Prime Minister Netanyahu spoke to the official in May of while on a tour of Japan. The official was said to be ‘shocked’ with the approach and rejected it.

Mr. Adelson is keen to see Las Vegas Sands enter Japan. “Right now our focus is on encouraging Asian countries, like Japan and Korea, to dramatically enhance their tourism offering through the development of integrated resorts there,” he said recently.

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