The prospect of casinos being permitted in Japan seems to be closer than ever. But the subject of casinos in Japan always comes with a cautionary note because it has been under discussion for much of the last decade without a final decision being taken.
Casinos are currently prohibited under Japan’s Penal Code. One reason for the delay in taking a final decision has been the instability at the top of Japanese politics in the last decade. With the resignations of Yukio Hatoyama and Naoto Kan, Japan has had seven different prime ministers since 2006.
In September 2006 Shinzo Abe replaced Junichiro Koizumi as the LDP’s Prime Minister. But Abe’s ruling Liberal Democratic Party (LDP) lost control of the country’s upper house in an election on 29 July 2007 and he resigned two months later. He was replaced by Yasuo Fukada who lasted only a year in the role before being replaced by Taro Aso in September 2008.
Aso was forced to call a snap general election in August 2009 after the LDP lost local elections.
Yukio Hatoyama was installed as the new DPJ Prime Minister in September 2009 but resigned in June 2010 to be replaced by Naoto Kan. Kan resigned in 2011. Such a ministerial merry-go-round is not conducive to the creation of good, practical gaming regulation.
The previous Liberal Democratic Party (LDP) government established a casino research group and major Las Vegas operators have been regular visitors to Japan, meeting with politicians to advise what casinos could bring to Japan’s economy.
In January 2007, the LDP set up a subcommittee to study a legal structure and policy for casino style entertainment. At the time it was seen as possible that the government would issue up to three licences for resort style casinos. More than 25 local government leaders lent their support to the casino policy. One of the highest profile supporters was the governor of Tokyo, Shintaro Ishihara, who stated that casinos would make Tokyo ‘better for everyone’, bringing 10,000 new jobs and regenerating the Odaiba waterfront.
The issue of casinos was raised again in 2010 under the new DPJ government.
The likelihood is that there would be two initial casino sites within designated economic zones. This number then could be increased to a maximum of 10, depending on the performance and impact of the first two. The selection and licensing process would be a combination of national and local government responsibility. The operator of the casino will be chosen by the local government, whilst the Casino Administration Organisation, under the Cabinet Office, will issue the operator’s gaming licence.
Casino operators have been assessing the potential for casinos in Japan and have indicated that Tokyo would be the preferred location with possible projects being planned for the city’s harbour area. Proposals are focused on developing huge entertainment complexes that include shopping, restaurants, and theatres, rather than just casinos, similar to Singapore’s two new integrated resorts. Sands China, for example, has said it is looking closely at Japan as a potential new market in the region.
Any developments would almost certainly see partnerships between local entertainment companies such as Sega Sammy, Konami or Aruze and the gaming industry international giants such as MGM Mirage, Caesars Entertainment, Wynn Resorts and Las Vegas Sands. The previous Liberal Democratic Party government was believed to be against 100% foreign ownership.
The LDP (now in opposition) reportedly intends to give its support to the Casino Act in the first quarter of 2012. As discussed above, when in government, the LDP set up research groups to look into the prospect of casinos in Japan.
Speculation that integrated resorts will be permitted has intensified with Sega’s comments in April 2012 that “when the law to legalise casinos is passed we would consider it carefully”. Sega Sammy Holdings has bought the Phoenix Sea Gaia resort in Miyazaki from RHJ International. The resort is home to a large water park as well as hotels, spas, and gold courses.
It would be very bold to predict that casinos will certainly be permitted in Japan, given the recent political and regulatory complications. But it is true that, in recent years, a number of economic difficulties and natural disasters have combined to give greater cause for the economic stimulus that casinos would provide than at any point in recent history. A simple desire for Japan to keep pace with its neighbours should not be underestimated either.