Will Gaming Be Big in Japan? Not Really, Says Current Expert Analysis

Japan market expectations apparently need to be tempered.

Manifesting Legislation

Much hope arose for this powerful economy when gambling legislation was passed in 2018; but the actual model which is feasible is turning out to be far more modest. 

Tokyo Out

For one thing, Tokyo is not even bidding on one of the three licenses Japan has made available for consideration.

Current Landscape

A lengthy and somewhat extended lugubrious process to bring IR casino resorts to Japan, compounded by the COVID-19 disruption, has apparently cooled down local prefectures and cities' interest closer to former times when Japan regulation was historically enigmatic.

Original Hope for Japan

Major casino operators share the lackadaisical approach, slowing progress in a region which operators viewed as the best opportunity in Asia since China’s Macau authorized new casino permits two decades ago.

The Original Legislation

The 2018 bill authorised up to three casino projects, receiving a response which ultimately subsided with only three cities currently interested. Further, only one recognized casino firm remains in the running, amid rumours central government officials are leaning towards delaying license-related concessions to applicants.

License Possibilities

At this point, IR development approvals could range from zero, to one, to two, to three, depending “entirely on the quality and integrity of each local government’s application,” according to Bay City Ventures casino advisory expert Joji Kokuryo.

Major Names Out

Big IR and gaming names whom have chosen not to bid on licenses in Japan include Las Vegas Sands, Caesars Entertainment, Wynn Resorts, Hard Rock International, and Galaxy Entertainment.

MGM Still In

MGM has stayed in the bidding through Japan's third-largest city Osaka’s $9.1 billion IR pitch to Japanese financial conglomerate Orix.

Yokohama About to Withdraw

Second biggest city Yokohama remains in the running through interest from Genting Group and Melco Resorts, but the new mayor Dr. Takeharu Yamanaka has pledged to withdraw the availability of casinos in Kanagawa Prefecture.

Regions In the Running

Two other candidate cities bidding for IRs are Nagasaki and Wakayama, relatively small cities ranked 36th and 53rd in population in Japan.

Operating Partners

Nagasaki has designated Casinos Austria as IR developer, while private equity from Clairvest Group is in the Wakayama fold.

Expert Warning

Kokuryo cautioned that bids will not be automatic:

“By no means will all be approved just for making submissions to the national government.”

Outlook

With all but one of Japan's 13 cities of 1 million plus population out of consideration, the prevailing belief is that not more than one or two licenses will be rewarded—hardly the robust leap forward originally hoped. Still, the awarding of any licenses would be a significant step forward.