Pulse

Nagasaki: Economic driver for regional growth and prosperity

By William - 1 November 2021

Yokohama’s exit from the Integrated Resort licensing process leaves Wakayama, Osaka and Nagasaki each with the potential to win one of the three remaining licences.

While Osaka is the front runner ahead of its smaller regional competitors, G3 speaks to Ken Hirata, Vice Governor of Nagasaki Prefecture, Japan, about the prefecture’s prospects and why it is so important for Nagasaki to secure a licence for the future prosperity of the region.

Why does Nagasaki prefecture want an Integrated Resort?

Nagasaki prefecture has long been an international gateway into Japan and over time has developed a unique regional culture. It is also one of the country’s most famous tourist destinations, featuring beautiful shores, hot springs and an abundance of fresh produce from both land and sea.

We expect the tourism demand in Asia to continue growing. With that said, Nagasaki has the geographical advantage of having a population of roughly one billion within a three-hour flight radius.

This will not only help our own prefecture, but also allow us to further develop as Japan’s tourism gateway, which is in line with our nation’s goals to develop as the tourism market.

We believe an integrated resort in Nagasaki will be the epicenter of this development that will bring benefits to the local city of Sasebo, the prefecture, the Kyushu region and the rest of Japan.

Who will be attracted to visit Nagasaki as a result of the IR? What are your expectations for tourism and economic growth?

Our main target initially will be our nearby neighbours such as China, Korea and Southeast Asian countries.

In terms of economic growth, our operating partner’s proposal has set expectations for economic impact at 320 billion yen, with over 30,000 job opportunities created in the process.

In regards to the criteria central government is following in the awarding of IR licences – how does Nagasaki fit this criteria above Osaka or Wakayama?

The Kyushu Island region in which Nagasaki is located has a very long history of international exchange that has led to much development. The region also boasts an array of natural tourism resources.

The resort site along the peaceful Omura Bay makes for a naturally scenic view, and as previously mentioned is in very close vicinity to many of the large Asian tourism markets. This allows us to create a new flow of tourism from Asia to Nagasaki to Kyushu and Japan.

The Kyushu-Nagasaki IR has the support of the entire Kyushu region and is considered as an “All- Kyushu” IR. The Kyushu Governors’ Association, Kyushu Prefectural Council Chairpersons’ Committee and the Kyushu Chamber of Commerce Conference among the entities that have supported the IR in an official capacity.

The Kyushu IR Council was created this April to promote regional procurement and tourism through effective measures, and has held seminars to provide concrete information on business opportunities and actual economic impacts to regional businesses.

This regional cooperation is not limited to political and economic support. The Kyushu Addiction Measures Network Council was formed this August and aims to create a cooperative network in handling all forms of addictions issues, including gambling addiction measures.

On top of the local support within Nagasaki, the support of the entire Kyushu region brings a unique and beneficial element to our IR development plans.

Do you think that the three remaining applicants, Nagasaki, Wakayama and Osaka, will now each receive one of the three IR licences – or is there a potential scenario in which only one or two licences are issued? What do you believe will be the outcome?

We are only focused on putting in our best efforts in order to obtain one of the three possible development licences. Whatever the result may be, we hope to have the opportunity to develop an IR in Nagasaki.

How political is the selection process? Is it purely on the basis of merit and statistics – or does party politics play a role in determining the location of the three IRs?

We will work with Casinos Austria to create our best IR development plan to submit to the national government. There are 19 requirements items and 25 evaluation items that we must consider and our mission is to make sure that we can check all the boxes for the requirements and score positively for the evaluation points.

The selection of Casinos Austria International to develop the Nagasaki IR surprised many. Could you explain why you chose a European operator that has never created an IR before? What was it about the CAI bid that was compelling?

We have held a strenuous evaluation process in which Casinos Austria was finally selected. They had scored the highest with the evaluation committee, especially in areas such as business concept, development policies and direction, and handling of concern points.

What are the essentials the IR project must deliver to be successful in Nagasaki? Which are the elements of the IR, aside from the casino, that will make the most impact in the prefecture?

The Kyushu-Nagasaki IR will become an international tourism center for creating a wide- ranging flow of tourist from the IR to Kyushu and Japan. Creating this wave of tourism also will lead to more demand of products and services, and create more high-standard job opportunities. We have high expectations for the economic benefits the IR will bring to Nagasaki and the Kyushu region.

What will convince future generations that this was the right idea? What will the legacy of the IR be for Nagasaki and your administration?

Developing an IR in Nagasaki will create a boost in non-resident population that will lead to economic benefits, which in turn will create new jobs leading to resident population growth and stability. We will also work to provide the most safe and secure IR in order to mitigate the concerns that people may have.

Has Japan accepted the idea of Integrated Resorts and casinos – do you think that the opening of the IRs will dismiss peoples reservations about casinos or reinforce them?

The Japanese government has set a national goal of reaching annual numbers of 60 million international visitors with 15 trillion yen spend by the year 2030.

IR development is an important element in driving development in tourism and industry in the post-Covid era, which should lead to IRs being accepted. As for the casino in the IR, we will work to set appropriate measures in order to minimise these concerns.

The recent elections in Yokohama saw the IR project abandoned after many years of planning and investment. Is Japan’s IR project still politically fragile? Could we see more of the prefectures both short and long-term reverse their interest in IRs?

In the case of Nagasaki, the prefectural council and the Sasebo city council has not had notable push back regarding IR development and we will continue our efforts in creating an understanding for this development project.

As previously mentioned, the regional support from the Kyushu Governors’ Association, Kyushu Prefectural Council Chairpersons’ Committee and the Kyushu Chamber of Commerce represents the All-Kyushu framework of the Kyushu-Nagasaki IR. The Kyushu IR Council is made up of both the public and private sectors.

Without discussing other regional situations, it can be said that Nagasaki and the Kyushu region are in sync about IR development.

The term of the casino licence is three years from the grant date of the licence and may be renewed for successive three year periods. Many bidders have been worried about raising the investment needed for an IR project due to the short-term of the licence and potential for political change. Is this a legitimate concern?

For us, we have up to now progressed under the regulations and requirements set by the national government, and so we will continue to find the optimal solutions and procedures within the parameters that have been set.

If Nagasaki is not granted a licence this time – will the prefecture continue to lobby for an IR when the IRs are reviewed again in five/seven years? Or is this the one and only chance for the prefecture?

At this point, our focus is solely on receiving approval for this round.

The number of licences is to be reviewed after seven years have elapsed from the date of first certification – do you see the number of IRs in Japan increasing beyond the initial three – and will Tokyo bid for an IR in the future?

I cannot speak for other regions, but I can say that we are absolutely focused on our own IR development plans. We look forward to welcoming our friends from around the world and hope to see you in Nagasaki in the near future.