Only 3 Japanase Prefectures Apply for a Casino License
Japan’s casino development plan faces a twist when only three prefectures applied to be considered for casino development: Osaka Prefecture, Wakayama Prefecture (pictured), and Nagasaki Prefecture. Japan has 47 prefectures, each of which has the right to bid on a casino license.
Including suburbs of major cities like Tokyo and Osaka, Japan has 12 cities with populations over 1 million people and 35 cities with more than 500,000 residents. Each has the right for a casino license. When the Integrated Resort Bill was passed in December 2016, most expected several major cities to apply for casinos.
Even last year when the Integrated Resort Implementation Bill (2018) was passed, the Japanese media reported that Tokyo, Yokohama, and Chiba were interested in building a casino. Now it appears that most Japanese city and prefecture governments are having second thoughts.
Kyodo News surveyed leaders from all 47 prefectures. A full 40 prefectures said they have no plans to pursue a casino license.
Restrictions on Japanese Gambling
Regional leaders considering legal gambling have cited concerns about public safety, social disharmony, organized crime, and gambling addiction. Due to a longstanding negative view towards pachinko parlors, which are run by South Korean immigrants, a 2017 poll showed that 60% of Japanese citizens do not want casino gambling.
For that reason, the Japanese Diet passed restrictions on their residents’ ability to gamble in casinos. Players can visit a casino 3 times in a 7-day period and 10 times in a 30-day period. They also have to pay a ¥6,000 entry fee, which amounts to about US$53 at the current exchange rate.
Facial recognition technology will enforce the restrictions, but foreign visitors will face no such limitations. The policies are designed to assure that Japanese high rollers can play, but mass market players without the funds or dealing with gambling addiction will be more hesitant to enter the casinos.
Osaka Welcomes the News
Despite the restrictions, the news that so few prefectures want casino gambling is good news to Osaka. While virtually all gaming media members believed Osaka would receive one of the three casino licenses which is up for offer in 2019, having so few competitors plays into Osaka’s hands.
As the heavyweight among the three regions which applies, Osaka is likely to have its choice among gaming operators who apply for a license. Being sited in Japan’s second largest city would be a boon to any casino operator.
Osaka Governor Ichiro Matsui said Osaka was ready to listen to offers from all applications: “From a business perspective, more options mean that we can demand something great. The more options there are to negotiate with, the harder each of the operators will work. We will be able to choose a place that will really contribute to the growth of Osaka.”
The early favorite to win the Osaka casino license is Las Vegas Sands Corp., the global casino company with the highest revenues in the world. While Las Vegas Sands traditionally was a second-tier Las Vegas Strip competitor, LVS’s casinos in Macau (Venetian Macau, Parisian Macau) and Singapore (Marina Bay Sands) are among the most lucrative in the world. LVS has a huge database of Asian customers and a recent aura of success.
Yokohama and MGM Resorts
MGM Resorts, another Las Vegas Strip casino giant, long was considered the favorite to win a potential Yokohama casino license. Since leaders in Yokohama’s Kanagawa Prefecture appear to have declined to submit a license application, that leaves MGM Resorts’ decision up in the air.
Chiba Prefecture, which showed a great deal of interest in hosting a casino, no longer appears to be a possibility. If Tokyo and Yokohama do not submit a license, then Chiba would become a prime location, due to its proximity to Tokyo.
No Tokyo Casino Resorts?
Tokyo’s hesitation to apply for a casino is less suprising. For years, Tokyo’s business and financial leaders seemed less interested in a casino than their Osaka’s counterparts. Also, with final preparations for the 2020 Summer Oympics reaching their critical stages, many wondered if the construction assets would exist for Tokyo to build a multi-billion dollar integrated casino resort in short order.
Tokyo always will be in consideration, while the IR Bill left open the door for a second wave of casino construction in a few years. Tokyo’s leaders can take a wait-and-see approach, observing how the casino economy affects other Japanese regions from a social, legal, and tourist perspective.
Japanese Casino Applicants
Las Vegas Sands and MGM Resorts are far from the only major applicants. Caesars Entertainment, another of the big four Vegas Strip casino companies, also plans a bid. Two of the three major Chinese casino companies in Macau — Melco Resorts & Entertainment and Galaxy Entertainment Group (GEG) — are planning to apply for a casino license.
Any of those five operators could invest billions of dollars in a casino — LVS and MGM Resorts each discussed $10 billion bids, while Lawrence Ho of Melco said he would bid “whatever it takes”.
Those five are not likely to be the only bidders. Rush Street Gaming out of Chicago has discussed plans in the past, while Japanese gaming groups like Universal Entertainment and Sega-Sammy also might submit bids. The Malaysian multinational corporation and gaming giant, Genting Group, is always a factor.
Whatever the case, unless new prefectures make 11th hour submissions, it appears that Osaka Prefecture, Wakayama Prefecture, and Nagasaki Prefecture will be the sites of the first three Japanese casinos.