A bill permitting the development of casinos in Japan has been passed in the closing days of 2016, nearly a decade after the Liberal Democratic Party’s (LDP) casino panel first recommended permitting casinos as a means of boosting tourism and regional economies.

After years of delays and false starts, events moved quickly in December 2016 when the ruling LDP teamed up with an opposition party to get the bill out of Cabinet Committee. Both the Lower and Upper Houses have voted for the bill in a parliamentary session that was extended to allow the bill to pass.

But there remains strong political and public opposition to casinos being permitted in Japan. During the December debate four opposition parties submitted a motion of no confidence in Prime Minister Abe’s Cabinet over the issue (which the government saw off). Many of the country’s main newspapers appear to have taken an editorial stance against the casinos and public opinion in not strongly in favour of casinos either.

Nevertheless, Shinzo Abe’s government sees casinos and the associated integrated resorts as a means of boosting tourism and Global Betting and Gaming Consultants (GBGC) believes the Japanese casino sector will be a very successful one.

Japan has a population of 127 million and although much has been said about its ageing population there are 46 million Japanese aged between 25 years to 54 years of age. Tokyo Haneda Airport is ranked fifth by passenger traffic, just ahead of London Heathrow and any new casinos are expected to bring in more tourists from nearby China and Korea. Income per capita is now $38,000.

“As a tourist destination Japan has a lot to offer. A casino just complements a large menu of attractions and infrastructure that is already in place. Japan could start to become a serious global player in gambling tourism and might even pose a threat to Macau”, said Warwick Bartlett, GBGC’s CEO.

There will be no shortage of companies wanting to take up the casino licences. GBGC expects Wynn Resorts, Las Vegas Sands, MGM, Genting and Crown along with local companies HIS, Resorttrust, Tokyotokeiba and Kazuo Okada’s Universal Entertainment all to be interested.

Shares in Las Vegas Sands (LVS), MGM and Wynn have all been climbing pending the news. LVS is known for producing iconic themed buildings and Wynn is known for attention to detail which the Japanese may favour. But local companies should not be ruled out.

The top ten casinos by gross gaming yield (GGY) are all located in Asia with Galaxy Macau occupying the top spot. The two casinos in Singapore operated by Genting and Las Vegas Sands produced a combined GGY of US$3.4 billion in 2015.

Both Macau and Singapore’s gross gaming revenue has declined since 2014 due to the clampdown by Beijing on VIP gambling.

Forecasts have been made by analysts on the potential gross gaming yield of the casinos in Japan. Morgan Stanley has said the market could be worth US$20 billion while others say US$40 billion. Having the first resorts open in time for the Tokyo 2020 Olympics is still a possibility.

“Exuberance always seems to follow a new market when it opens up. Analysts always get ahead of themselves. At the moment GBGC is keeping its counsel until we see how many licences will be granted, where those licences will be located, and what the all important tax rate will be,” said Warwick Bartlett, GBGC’s CEO.