Japanese Prime Minister Shinzo Abe added a tour of Marina Bay Sands (MBS) to his visit to Singapore late last month to deliver the keynote address at the Asia Security Summit.
Back home, however, plans were unraveling to get a much-anticipated bill through the National Diet to legalize casinos, a policy he is said to support.
Abe’s walk through Las Vegas Sands’ massive and massively profitable super-resort was to include a “scripted plea” from the company to pressure the Diet to act on the troubled bill, or so Chairman Sheldon Adelson told the press. Adelson had vowed to spend “whatever it takes” to win the right to build something even bigger than MBS in Tokyo. But the window for making that happen is closing rapidly, and it’s all but certain the Diet will conclude its regular 2014 session on 22 June without ever bringing the bill to a vote, dashing the hopes of LVS and the rest of the world’s A-list operators of cashing in on a market some analysts believe could be worth as much as US$40 billion over the next decade.
The last chance for salvaging the market in time for the 2020 Summer Olympics in Tokyo would be passage in a short special session the Diet is expected to convoke in the fall. But that presumes the bill’s supporters can accomplish in a matter of weeks what they couldn’t given more than six months. If they don’t they’ll have to try again in 2015, at which time much of the legislative momentum that buoyed the current effort will have been lost.
“Time is of the essence,” MGM Resorts Chief Executive James Murren said. “There seems to be a very strong political will to move this forward, and who knows what the environment will be a year or two from now.”
Will, perhaps. Votes, no.
“Time is of the essence,” MGM Resorts Chief Executive James Murren said. “There seems to be a very strong political will to move this forward, and who knows what the environment will be a year or two from now.”
Will, perhaps. Votes, no.
Gambling on pari-mutuel racing and pinball-style pachinko machines are huge industries in Japan, but casinos are banned by law and remain a socially sensitive and controversial topic, one on which lawmakers are reluctant to spend too much political capital, or so it appears from the way the legalization effort has stalled despite what was reported to be the unanimous backing of the governing Liberal Democratic Party and its coalition partner, New Komeito.
The pro-casino caucus in the House of Representatives, the more powerful of the Diet’s two chambers, is said to number 200 and includes veteran lawmakers close to Abe. In March 2013, not three months after taking office, the prime minister was in front of the House talking about the important role destination casinos could play in boosting foreign tourism.
The pro-casino caucus in the House of Representatives, the more powerful of the Diet’s two chambers, is said to number 200 and includes veteran lawmakers close to Abe. In March 2013, not three months after taking office, the prime minister was in front of the House talking about the important role destination casinos could play in boosting foreign tourism.
LDP/New Komeito hold an unassailable 67 percent majority in the House. In June 2013, they unseated the opposition Democratic Party of Japan to regain a majority, albeit a much slimmer one, in the upper House of Councillors. So when the bill, which encompasses only two pages, was unveiled at the end of last year it was with considerable media fanfare, and most of the biggest names in the industry commenced in earnest to tallying the upside. The bill was supposed to sail into spring and on to passage by mid-May. But that didn’t happen, and Morgan Stanley was the first to raise a red flag in a client note issued at the end of April. The bank’s research suggested the LDP wasn’t satisfied with the support from New Komeito and from small but influential parties like the far-right Japan Restoration Party and the pro-business Your Party, not to mention the opposition DPJ.
But the LDP’s need to achieve such all-inclusive consensus was itself suggestive that support for casinos within the party may not have been as solid as the caucus’ leaders were saying it was. It’s possible as well that no one was having much luck either with the much thornier problem of devising a licensing and taxation regime—these were to be taken up in a follow-up bill for 2015—capable of satisfying the many divergent political, business and community interests that characterize Japan’s highly federalized prefecture system of government.
There is lastly the fact that no one bothered to ask the Japanese people what they think, which at this stage has to be viewed as worse than an oversight.
What little is known about this critical element in the equation was contained in a February report published by investment bank CLSA, which had commissioned a nationwide poll conducted in January 2014 among 1,000 adult men and women divided evenly across five age groups. Results showed that one in five respondents wasn’t even aware a legalization effort was under way, and only 7 percent professed any knowledge of the details. Only 15 percent answered an unequivocal “yes” to the question “Do you think large IRs can boost the economy?” Fewer than 24 percent said they have a “good” or “somewhat good” impression of IRs. More than 51 percent said they believed IRs would result in a “significant increase in crime”. Only 34 percent said they believe the “positive aspects of IRs outweigh negatives”.
There is lastly the fact that no one bothered to ask the Japanese people what they think, which at this stage has to be viewed as worse than an oversight.
What little is known about this critical element in the equation was contained in a February report published by investment bank CLSA, which had commissioned a nationwide poll conducted in January 2014 among 1,000 adult men and women divided evenly across five age groups. Results showed that one in five respondents wasn’t even aware a legalization effort was under way, and only 7 percent professed any knowledge of the details. Only 15 percent answered an unequivocal “yes” to the question “Do you think large IRs can boost the economy?” Fewer than 24 percent said they have a “good” or “somewhat good” impression of IRs. More than 51 percent said they believed IRs would result in a “significant increase in crime”. Only 34 percent said they believe the “positive aspects of IRs outweigh negatives”.
Anyone familiar with these findings could not have been surprised earlier this month when Tokyo’s new governor, Yoichi Masuzoe, a popular independent seen by some as a rival for Abe’s job, said a casino was not a priority for his city. Nor are casinos expected to be included in an important economic policy speech Abe is scheduled to deliver the end of this month.
The reality is the Japanese people have more important things to occupy them. The world’s third-largest economy has been stagnant for a generation. It was sick long before the tsunami and Fukushima disaster. The economic revival the LDP promised when it was swept back into office in a 2012 landslide has yet to materialize. The soul-searching that is going on now is of a scale not seen since 1945.
The reality is the Japanese people have more important things to occupy them. The world’s third-largest economy has been stagnant for a generation. It was sick long before the tsunami and Fukushima disaster. The economic revival the LDP promised when it was swept back into office in a 2012 landslide has yet to materialize. The soul-searching that is going on now is of a scale not seen since 1945.
The system for compensating victims of the Fukushima disaster needs to be reorganized. Education reform is another hot-button issue and one dear to the heart of the nationalist Abe, who wants to demolish the war guilt curriculum taught to Japanese children for 60 years. Constitutional reform has emerged as perhaps the biggest issue, and the remilitarization implied by Abe’s plan is splitting the pacifists among his lay Buddhist New Komeito partners and elevating the extremist JRP, which holds 54 seats in the House of Representatives, into something of a spoiler’s role on key issues.
Actually, this should have been good news for casino advocates. The JRP is led by three of legalization’s biggest supporters, Osaka Mayor Toru Hashimoto, the governor of Osaka Prefecture, Ichiro Matsui, and nationalist firebrand Shintaro Ishihara, a former governor of Tokyo. And yet it may have helped kill the bill at a critical juncture when Hashimoto and Ishihara fell out with each other in May over how far to go in rewriting what the JRP calls the “Occupation Constitution”.
Actually, this should have been good news for casino advocates. The JRP is led by three of legalization’s biggest supporters, Osaka Mayor Toru Hashimoto, the governor of Osaka Prefecture, Ichiro Matsui, and nationalist firebrand Shintaro Ishihara, a former governor of Tokyo. And yet it may have helped kill the bill at a critical juncture when Hashimoto and Ishihara fell out with each other in May over how far to go in rewriting what the JRP calls the “Occupation Constitution”.
It may well take a national referendum to decide the Constitution issue, and that will likely complicate the legislative agenda for the Diet’s pro-casino camp. Or it’s possible, though less likely, that it will prove enough of a popular distraction to simplify things for them.
Toru Mihara, an adviser to casino caucus in the House, expressed the uncertainty best when he told The Wall Street Journal he was optimistic the bill would be passed—just “not in the near future”.
Toru Mihara, an adviser to casino caucus in the House, expressed the uncertainty best when he told The Wall Street Journal he was optimistic the bill would be passed—just “not in the near future”.