Japan passes bill to lift ban on casinos

Business News,Features

Global gaming operators watch closely after first step towards $40bn market.

In a parliamentary session that lasted less than 15 minutes and saw protest walkouts by some MPs, the lower house of parliament voted through a casino promotion bill that has been years in the making.

The vote, which came with the tacit support of Japan’s leisure, construction, banking and electronics industries, has the potential to transform a market where only a handful of betting formats are legal. Pachinko, the nation’s favourite form of gambling, made $34bn in gross gaming revenue in 2015 but is played in a legally grey area.

Legalisation of casinos, which newspaper polls suggest is not supported by a majority of Japanese, has been a pet project of Mr Abe since he became prime minister four years ago. Casino resorts are seen by a clique in the ruling Liberal Democratic party as a way of securing legacy after the Tokyo 2020 Olympics, and paying for tourism infrastructure as the number of inbound visitors rises above 20m a year.

“This is a huge, huge win for Japan Inc,” said a consultant to international casino operators. “They have lived, quietly, through several false dawns on casinos and now the situation is the closest to legalisation the country has ever been.”

For Japan Inc and the world’s biggest casino operators, legalisation would set up a two-stage beauty contest. The first will be fought among a handful of Japanese cities that will vie to host the first integrated resort facilities. The contest is likely to take a similar form to the way that Olympic bids are presented. Tokyo and Sapporo will submit proposals but Osaka and Yokohama, say people involved in preparations for those bids, have the most advanced proposals.

After that, the chosen cities will select between consortiums of hotel operators, construction companies and other groups to build and manage the resorts. Global operators such as Las Vegas Sands, MGM, Genting, and Wynn have spent four years laying the groundwork to pitch for business in a market that analysts at CLSA say could eventually match Las Vegas or Macau.