Japan could approve fewer than three casinos in first round of liberalisation process

By Mia Chapman Updated
Japan could approve fewer than three casinos in first round of liberalisation process

The first phase of casino liberalisation in Japan may not result in three licences being granted, as has been the long held stance.

GGR Asia reports that several industry observers have said that in the wake of the election of anti-integrated resorts mayor Takeharu Yamanaka in Yokohama, the national situation may change.

Yamanaka said the city would not apply to join the bidding process to host a casino complex after his election.

A maximum of three integrated resorts are permitted nationally in Japan’s initial phase of market liberalisation.

Yokohama, near Tokyo, is the second most populous city in Japan, and its likely withdrawal from the IR race leaves three interested cities bidding for the same number of licences.

Osaka, the nation’s third most populous city, is now the only large-scale metropolis remaining as a candidate.

Wakayama, adjacent to Osaka, and Nagasaki, are the other would-be host locations.

Industry experts weigh in on state of play in Japan

Local authorities interested in hosting a casino resort must first select a commercial partner, and then apply to the national government for the right to host such a facility.

“Three is the maximum number of licences stated in the law itself. This doesn’t mean that the government has to decide on awarding licences to three casino resorts,” a scholar specialising in Japan’s public policy on gaming Toru Mihara said.

Industry consultant Joji Kokuryo shared a similar view.

He said: “Osaka, Wakayama and Nagasaki and their integrated resort partners will each have to earn national approvals for their integrated resort development plans.

“Of course, the first phase of approvals will have to come from the actual applications, but by no means will all three be approved just for making submissions to the national government.”

“There could be zero, one, two or three integrated resort development approvals given.

“This will depend entirely on the quality and integrity of each local government’s application,” suggested Mr Kokuryo, managing director of Bay City Ventures, a Tokyo-based consultancy with specialist interest in Japan’s casino liberalisation drive.

Japan’s national government will be accepting integrated resort plans from local governments between October 1, 2021 and April 28, 2022.

The initial phase of casino resorts’ opening is assumed to take place in the latter half of 2020s, according to previous commentary made by local governments.

Current bidders advance their plans as future casino homes floated

The three locations still in the race are currently in the final stages of choosing their private sector partners.

Casino operator MGM Resorts, alongside Japan’s Orix Corp, is the sole qualified bidder in the process to develop a casino resort in Osaka.

Japan’s Nagasaki prefecture said in August that it had selected Casinos Austria as its “priority candidate” for its tilt at having an integrated resort.

In July, Wakayama prefectural government said it had approved a consortium led by Clairvest Neem Ventures as its partner.

Partner and director of government affairs at casino industry consultancy Global Market Advisors Brendan Bussmann said: “While the IR race appears to be down to three, there could be a scenario where only one is selected. This would leave the other two licences up for consideration under a different timeline and scenario.”

As Yokohama’s mayor-elect said he planned to withdraw the city from Japan’s integrated resort race and abolish the IR Promotion Office soon after taking office on August 30.

“The national government could shift the selection period using the reason of prioritising their efforts to fight the pandemic,” former casino executive Daniel Cheng said.

The industry observed continued: “A six-or 12-month delay and an endemic COVID-19 environment may be conducive for other host candidates to emerge: Hokkaido, Aichi, Fukuoka, Tokyo – each locations’ micro-factors permitting.”

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