If members of the Diet approve the new legislation, a government task force will work on jump starting preparations for new casino resorts.
Even though the new Japanese gambling law has not been adopted yet, the Government led by Prime Minister Shinzo Abe has decided to set up a special task force to help hasten procedures for approving and completing new casino resorts in the country.
Integrated gambling resorts are a promise Abe made a while back. They’re part of a reform meant to revive the local economy, but so far these plans have failed. Furthermore, Japan’s GDP dropped 1.7% during the second financial quarter, indicating that the government’s new policies are not working.
Knowing that the casino bill has been stuck in the Diet for a while now, the administration is hoping that the new task force will help revive momentum for resorts to be built in time for the 2020 Olympic Summer Games in Tokyo.
One more try
Some suspect another reason behind the Abe administration’s initiative is to keep investors interested in Japan. Some gambling companies have promised to spend billions of dollars to build resorts here, but with lawmakers dilly-dallying over the casino bill, investors might decide to take their bags of cash somewhere else.
With Japan’s current economic landscape and disappointing figures reported this second quarter, you don’t have to be a financial expert to see why some might think that such huge billion-dollar investments are not justified.
Introduced last December, the casino legalization bill failed to come for a vote in the regular Diet session that ended in June. Lawmakers are still debating a number of aspects, including whether to allow locals to play in casinos and Japanese poker rooms.
Authorities were considering offering three casino licenses, and said that they might be following Singapore’s example in charging locals a fee to enter these venues. According to early August news reports, Japanese officials were discussing introducing entry fees for tourists too, an idea that quickly became unpopular with investors.
Supporters of the casino bill brought the document up for debate a few days before the end of the legislative session. A special session of the Diet is expected to open within the next two months, and the bill is now eligible for consideration.
Casinos could be big in Japan
Those who are in favor of casinos being legalized in Japan see this new industry as a way to resuscitate and boost the local economy. After financial analysts predicted the country’s gambling market could be worth billions, investors lined up with their offers.
But a recent report published by Morgan Stanley sees many flaws in Japan’s big plan, and claims the market is not as profitable as most companies expect. The consensus is that annual gaming revenue could reach around $40 billion for resorts operating in Tokyo and Osaka, and an additional 10 smaller casinos in other areas.
That’s almost equal to the gaming revenue made in Macau, which is currently the largest gambling hub in the world, and six times bigger than the revenue made in Las Vegas and Singapore. Considering that Japan is the world’s third largest economy and its 128 million people spend $36 billion on pachinko, there is clearly a lot of potential.
But all this doesn’t mean that profits are guaranteed. The market is still unpredictable and there is no way of being sure that locals will turn from pachinko to casino games. That is, if they will be allowed to gamble at all.
Addiction on the rise
Meanwhile, the latest statistics regarding gambling addiction in Japan are quite worrying and many believe that a recent study published in local gambling news could make officials change their minds about legalizing casinos.
According to the survey, 4.8% of Japanese adults are suspected of being problem gamblers, despite the fact that they’re not even allowed to play casino games under the country’s current laws. So instead of roulette, slots, or blackjack, the Japanese are hooked on pachinko, and many of them admitted their gaming habit has slipped out of control.
Headed by addiction expert Susumu Higuchi, the survey raised a lot of concerns, including regarding the imminent legalization of casinos.
“If something new becomes available, addiction will only rise,” the expert told reporters. “On a global basis, Japan has one of the highest ratios of pathological gamblers as gambling devices such as pachinko and slot machine games are ubiquitous,” he added.
The ratios of both male and female problem gamblers were indeed much higher in Japan, compared to Switzerland’s 0.5%, Louisiana’s 1.58%, or Hong Kong’s 1.8%.
Industry experts believe a decision could be made by the end of this year, but they’re not too optimistic about this deadline, considering how slow the process has been so far. If these legal and administrative procedures take long, there might not be enough time to open Japan’s first casinos on time for the 2020 Olympics.