CASINO

Japan casino bill hopes fading as clock ticks down on legislative session

TAGs: Japan, MGM Resorts

japan-casino-bill-chancesHopes are fading that Japan will pass legislation authorizing development of resort casinos before parliament’s current legislative session expires. Lawmakers had been expected to pass a so-called ‘study bill’ that would create the legal framework for casinos before Japan’s Diet breaks for the summer on June 22. But attendees at this week’s inaugural Japan Gaming Congress were crestfallen to learn that top legislators now view the study bill as having no better than a 50/50 chance of passing.

That pessimistic prognosis was offered on Thursday by Japan Restoration Party MP Sakihito Ozawa, a key member of the bipartisan committee engaged in the Sisyphean task of rolling the casino boulder through the Diet. Ozawa had previously estimated the study’s bill chances of passing at 90%, but with 17 bills up for discussion by the Diet, there may not be time.

Any bill passed by the Diet must be sent to Japan’s Upper House 20 days before the legislative session ends. Ozawa told the Wall Street Journal that May 30 was the only likely day on which the casino bill might find its way onto the agenda. A decision on whether that will happen will likely be made next week. Ozawa says the bill’s chances of coming up for debate will come down to whether the ruling Liberal Democratic Party (LDP) has the “guts” to push the envelope.

The LDP is trying to win individual support of members of coalition partner the New Komeito Party, which has been lukewarm on the casino idea in order not to erode the party’s support from Buddhist groups. The chair of the Upper House committee tasked with debating the bill has also expressed hostility to casinos. This week saw Communist Party MP Mikishi Daimon tell an anti-gambling rally it was “vital that we won’t let the [casino] discussion begin.”

Union Gaming Group analyst Grant Govertsen has said that if the study bill doesn’t pass this year, “it will be exceedingly unlikely that the first integrated resort could open prior to 2020.” Tokyo is set to host the Olympic Games that summer but CLSA gaming analyst Aaron Fischer told Bloomberg that his group didn’t view the Olympics “as a deadline for having integrated resorts per se.”

MGM Resorts CEO Jim Murren told conference attendees that 2020 was “a worthy, ambitious and achievable goal if there is proper focus.” Murren said it would be “a tremendous missed opportunity” if debate on the issue was to drag on for another couple years. MGM has pledged to spend up to $10b building its casino if it’s lucky enough to be granted a license.

But doubts linger over whether Tokyo would be able to handle resort casino development amid preparations for the Olympics. Masao Kaneda, head of a casino project team at Japanese construction giant Obayashi Corporation, told Reuters the demands on Japan’s labor supply would create “a very tight situation in and around Tokyo.” Kaneda suggested Japan might want to start with a smaller scale casino project in a regional market.

Nothing has been finalized, but speculation has it that Japan will eventually authorize large casinos in two major centers like Tokyo and Osaka plus two smaller regional operations. Analysts have estimated Japan could become a $40b market within five years of opening its casino doors.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com