Hurry Up and Wait: Japan Legalises Gambling, but Operation Remains Far Off

Published December 18, 2016 by Lee R

Hurry Up and Wait: Japan Legalises Gambling, but Operation Remains Far Off

Operators will have to wait to enter the market until well after the Tokyo Games.

Intriguing Japan has perfected its own version of regulation last Thursday, though it will be years before legalised gambling actually takes place.

The IR Legislation 

Passing with the joint approval Prime Minister Shinzo Abe along with the ruling Liberal Democratic Party, the Casino Bill maps the integration of so-called large-scale integrated resorts (IRs) combining casinos with hotel, shopping and conference facilities.

Heaven Must Wait

Casinos cannot actually open in Japan until at least 2022, well after the Tokyo 2020 games, pending further legislation for regulation, tax rates and safe gambling procedures and requirements.

Landing Spots

The first IR locations identified so far in Japan include an artificial island in Osaka Bay called Yumeshima; Sasebo; Yokohama; and Hokkaido. Las Vegas Sands Corp, Wynn Resorts and MGM are among the first casinos looking into opening operations in the country.

Environmental Context

The only gambling previously permitted in Japan was betting on horse, boat and bicycle races through government-backed bookmakers. Up to this point, it was illegal for land-based casinos to operate in the third largest economy in the world, whose casino industry value has reached $40 billion by some expert estimates.   

Joint Ventures

International Casino Institute CEO Takashi Kiso disclosed that operating enterprises were likely to take place in the form of joint ventures between international gambling groups and Japanese companies, with MGM Resorts, Wynn Resorts and Las Vegas Sands having already expressed interest and MGM’s CEO telling Reuters already in October that his organisation was preparing up to $10 billion for Japanese casino investment.

Opposition Stance

Longstanding opposition stems from concerns regarding gambling addiction, money laundering, and the potentially negative impact of casinos on local neighbourhoods.

Public Opinion

A public broad poll by Japan’s NHK revealed minimal support from the Japanese public, with 44% of the Japanese public opposed casinos and just 12% in favour, and 34% undecided.

Addiction Issue

Public opposition is based mainly on addiction concerns. A 2014 study Japan Health Ministry revealed that approximately 5 million people, or some 5 percent of the adult population, were addicted to gambling, substantially higher than 1 percent median rate found in other countries.

Positive Outcomes Promised

Pro-casino lawmakers promised measures to combat addiction and money laundering, as did prospective operators, with both groups assuring the casino plan will create jobs and make Japan a more alluring tourism destination.

Implications for iGaming

The wave of optimism and promises notwithstanding, the ramifications for iGaming look far off. Japan certainly has appeal as a lucrative iGaming market, but with so much more red tape to get through before even bringing land-based gambling into effect, it will be a long time before iGaming operators have a realistic opportunity there.   

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