Japanese government halts casino process

By Charlotte Lee Updated
Wakayama provides clarity on financial investors in integrated resort

The Japanese government will delay part of the process for selecting casino host cities amid a bribery scandal that has seen the arrest of ruling-party lawmaker Tsukasa Akimoto, sources have said.

The Japan Times said the government had originally planned to set by this month a basic policy to determine guidelines for selecting cities, but officials are now looking to postpone that process, the government sources said.

Last month, prosecutors arrested Akimoto, a Liberal Democratic Party lawmaker previously in charge of casino policy, on suspicion he accepted bribes from a Chinees company seeking to build a casino in Japan.

The arrest has hardened public opposition to the already unpopular plan to allow casinos.

In response, the government intends to consider adding rules to the basic policy on when resort operators make contact with ministers, vice ministers or parliamentary secretaries.

Hamstrung by a weak economy and a shrinking population and tax base, Japan is pushing to boost tourism through “integrated resorts” – Las Vegas-style complexes that include casinos, shopping arcades and conference centres.

While the government aims to open casinos in the mid-2020s at the earliest, a significant delay in the creation of the basic policy may affect the schedule.

The basic policy will provide the criteria for rating area development plans to be submitted by municipal or prefectural governments for hosting casinos.

A draft of the policy released by the government in September last year included evaluation items such as the effect on local economies and ways to eliminate harmful impacts of casinos.

However, the government plans to make no change to the schedule for accepting hosting bids from municipalities and prefectures in the around seven-month window between January 4 and July 30, 2021, after the basic policy is adopted.

If bids progress smoothly, integrated casino resorts could start operating by the mid-2020s, the government has projected, taking into account the three- to four-year period likely to be required for construction work.

But the schedule might be pushed back if the decision on formalising the basic policy and other processes are significantly delayed.

Opposition parties are stepping up their criticism and introduced a bill that would scrap related laws to the Diet on Monday, when its regular session for this year started for a 150-day run.

The government plans to allow up to three casino resorts to be opened.

Potential bidders include Tokyo, Yokohama, Osaka – Japan’s three largest cities, and smaller ones including Nagasaki and Wakayama.

Osaka down to three bidders

The race for the development of an integrated resort in the Japanese city of Osaka has narrowed to just three bidders.

Casino News Daily reported in September that MGM Resorts International, Galaxy Entertainment Group and Genting Singapore are the three in the running.

According to reports from Japanese media outlets, the above-mentioned three companies have submitted a request for concept proposal for the development of a resort with dedicated casino space.

Japan legalised casino gambling in 2016 and authorised the construction of up to three integrated resorts with gaming floors to create a market some analysts believe could annually see $20 billion in gaming revenue.

Osaka has long been considered the front runner in the casino race due to the large number of international visitors the city welcomes every year, as well as the strong local political support the potential development of a gaming resort has seen.

Analysts also believe that Yokohama, Nagasaki, Wakayama, and event Japan’s capital Tokyo could be selected as hosts to the country’s first three integrated resorts.

Yokohama recently joined officially the casino race, with the city’s mayor Fumiko Hayashi, saying that they need an integrated resort in order to “achieve growth and development.”

Up until recently, Osaka was favoured by a number of major international developers in their plans to build a resort and tap into Japan’s nascent casino market.

However, that changed quickly with Yokohama’s announcement that it would look to host one of the three gaming complexes.

Yokohama is Japan’s second largest city, a major port that sits juts south of Tokyo.

Over the years, a number of major gaming and hospitality operators have shown strong interest in bringing integrated resort experiences to Osaka.

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