Though Japan’s Parliament will not vote on a casino expansion bill before its November 30 adjournment, casino expansion is not a dead issue just yet. A gaming bill is expected to be debated when the Parliament reconvenes in early 2015.
MGM Resorts Executive Analyzes Latest News
MGM Resorts International Senior Vice President Alan Feldman says the lack of movement might be frustrating for American gaming companies, but industry observers are overreacting to delays. He says that top gaming executives always knew it would be a difficult path to have Japan’s lawmakers approve casino gambling, but the opportunity has not passed.
Feldman told Howard Stutz, “I just think there is a lot of overblown coverage about what’s going on in Japan. We have known for a long time this wasn’t going to be easy. I just don’t believe the effort will be stopped unless there is a change in the ruling party, the prime minister and the upper and lower houses (of the Diet).”
Japanese Politics
The ruling coalition should continue in power for some time, though it faces significant turmoil in the Shinzo Abe’s cabinet. The turmoil is one of the reasons the bill hasn’t passed yet, but such phases pass in due time.
Shinzo Abe (pictured above) made the passage of a gaming bill a part of his legislative agenda. Part of his public awareness campaign involved tying such a plan to the 2020 Summer Olympics, which will be centered in Tokyo.
2020 Summer Olympics Deadline
Much of the gaming media coverage has focused on the time table to have new casinos built by the time of the 2020 Olympics. That created the false impression that the casino issue is a now-or-never proposition.
Alan Feldman refutes that suggestion, saying that the Japanese are seeing casino gambling as a way to boost tourism after the hoopla of the Olympics dies down. Thus, gaming executives are taking the long view of such matters, realizing their opportunity has not passed up.
60% of Japanese Oppose Land Casinos
Despite that prognosis, the issue is a complicated one. A recent poll suggested that 60% of the Japanese electorate does not want to see casinos built in Japan. Any politician is going to look at those numbers and hesitate, so the Prime Minister is going to have to exhibit strong leadership to push the measure through the Japanese Diet. Also, measures must be taken to convince the Japanese people that casino gaming is good for their country.
Set against the poll numbers is the obvious fact that Japanese love to gamble. Pachinko parlors, which feature low-stakes and simple gaming machine, take in about $187 billion each year. That makes Japan the world’s single-largest market for gaming machines–greater even than the American slot machine industry.
Casinos for Tourists Only
One reason proponents in the legislature has stalled is an attempt by some Japanese leaders to write laws which make land-based casinos a destination only for non-Japanese tourists. Japanese citizens would not be able to gamble in the venues, which would avoid problem gambling and other social issues sometimes associated with land casinos.
Such a law would be a non-starter for some of the largest gaming companies. The Las Vegas Sands Corporation is the largest gaming company in the world, and LVS’s Sheldon Adelson is one of the executives ready to secure a Japanese gaming license, if such licenses are approved.
Sheldon Adelson Critical of Such Casinos
Adelson recently said, “Our unique convention-based integrated resort development model will bring meaningful benefits to Japan in terms of business and leisure tourism, employment and economic growth. We are not interested in foreigners-only resorts.”
The reason for Adelson’s stance is simple: such casinos would not be nearly as profitable for the gaming companies. The reason to build casinos in Japan is to take the Japanese economy, which is the 3rd-largest in the world behind the United States and China. If such casinos only existed to lure Asian gamblers, then it would be redundant for Las Vegas Sands and its competitors. Such casinos already exist in Macau and Singapore, and LVS owns some of them. Spending billions of dollars to lure Chinese high rollers to Japan would make no sense.
Casino Fee for Japanese Players
One compromise which might be put forward is the use of casino fees at the door of Japanese casinos. Such a plan is what ultimately succeeded in Singapore. To play at the casino, a Japanese resident would need to pay an up-front fee. The idea of such a fee would be to keep problem gamblers away, as it would imply the desperate would not have the money to pay stiff fees at the door. That would allow upper middle class mass market players and high stakes gamblers to enter and enjoy themselves, while avoiding the worst social ills.