Osaka Leaders, Global Gaming Execs Praise Japanese IR Bill

Osaka’s politicians joined with global gaming executives in praising the Integrated Resort Bill (IR Bill) which passed by the Japanese Diet and approved by Prime Minister Shinzo Abe recently. Osaka Gov. Ichiro Matsui expressed relief the bill had passed and said it was the culmination of ten years of work and vision.

Gov. Matsui said he and former mayor Toru Hashimoto discussed ways to improve tourism to the Osaka metropolitan area a decade ago and discussed casino gambling as a prime way to lure more visitors. Matsui said, “(We discussed) the need to strengthen Osaka’s tourism sector by introducing integrated resorts. Everybody said then it couldn’t happen and there was a lot of opposition, especially in the media, to our idea.”

The IR Bill has restrictions that some consider troublesome, but Matsui does not see major obstacles to success. All Japanese residents will be charged a ¥6,000 entrance fee — roughly $55 or $56 in US dollars — to enter the casino. The idea is to weight the Japanese casino industry towards high rollers, who can afford such fees, while seeking to eliminate problem gamblers, who presumably could not afford entrance fees.

Japanese casinos will cater to foreign tourists, of course, who will not have to pay an entrance fee at all.

Osaka’s Yumeshima Island Casino

Osaka’s politicians want the casino planned for Yumeshima Island, an artificial island in Osaka Bay. The city’s leaders hope Yumeshima is the pivotal site in a successful bid for the 2025 World Expo.

Gaming operators have different concerns. They want investments from the Osaka Prefecture Government in infrastructure projects to make Yumeshima a viable casino site. In particular, potential Osaka casino companies will want the prefecture to spend a lot of money on a modern bridge to Yumeshima Island.

MGM Resorts Japan’s Statement

Ed Bowers, the CEO of MGM Resorts Japan and a representative officer for MGM Resorts at the Grand Front Osaka showcase this week, said he is comfortable with the bill that passed last Friday. At the same time, he urged Osaka’s politicians to focus on building a world-class casino operation — instead of the infrastructure surrounding such a casino.

Bowers said casino companies alone cannot spend on infrastructure costs, like the hypothetical Yumeshima Bridge. Bowers said, “The more that is invested in infrastructure, the less that can be invested in the integrated resort.”

Japanese casinos will be limited to 3% of the casino floor-space for gambling. That is the same amount as Singapore, but less than the percentage (5%) allowed in Macau. MGM Resorts is one of two casino companies given the best chance of securing an Osaka casino license, but it reflects the concerns that United States casino company executives have expressed about restrictions in the Japanese casino regulations.

Melco Japan’s IR Bill Attitude

Geoffrey Davis, Melco Resorts & Entertainment Japan Ltd.’s CEO and Melco’s representative at the Grand Front Osaka exhibition, expressed no concerns whatsoever about such restrictions. Mr. Davis said, “We haven’t seen anything in the Japanese casino legislation that isn’t manageable.”

Melco Resorts & Entertainment was one of the early casino groups to express interest in Japan. Melco Resorts is a Macau-based casino company which is traded on the Hong Kong Stock Exchange. 41-year old Lawrence Ho, son of Stanley Ho, said early on that he would “pay whatever it takes” to win a Japanese casino license.

Throughout the process, Lawrence Ho has appeared to be particularly plugged in to the Japanese IR Bill. He made several predictions about when the licensing process — one that was accurate and one that was not. Melco is considered a leader alongside MGM Resorts to secure the Osaka casino license, both because Ho has promised to move the company’s HQ to Japan and because he introduced the Melguard security system, designed to track the play of Japanese gamblers — a big concern for Japan’s lawmakers.

Restrictions on Japanese Gamblers

The Melguard system dovetails with the spirit of Japan’s lawmakers, who placed limits on the number of casino visits that residents could make. Japenese citizens will not be able to visit a casino more than 3 times in a single 7-day period. They also cannot visit a casino more than 10 times in a 30-day period. Both will be tracked with national identity cards. Once again, non-residents do not face such restrictions.

Despite those restrictions, Osaka would be a big beneficiary of the new gaming venues. Japan imposed a 30% tax on gaming revenues, with 50% of the revenues going to city and prefecture governments. It is the indirect revenue of bringing in tourist that seems to be the main draw for men like Toru Hashimoto and Ichiro Matsui, though.