Almost everyone has caught the optimism bug on the passage of Japan casino bill. All except international brokerage firm Morgan Stanley.
The investment bank said in its Monday’s note that it doesn’t see the Japanese lawmakers passing a bill that will legalize casino in the East Asian nation despite gaining support from the ruling Liberal Democratic Party (LDP) of Prime Minister Shinzo Abe.
After years of being sidelined, a bill to introduce integrated resorts (IRs), with hotels, casinos, malls and other entertainment facilities is being deliberated by legislators in the parliament’s lower house, which is due to run until November 30.
Many believe that there is a likelihood that the controversial bill will pass this year after Prime Minister Shinzo Abe reshuffled the LDP in August and appointed three pro-casino officials were promoted to top spots.
Morgan Stanley, on the other hand, begged to disagree. It pointed out that legislators only have little time to pass the legislation in both houses. It, however, conceded that it remains possible that the session may be extended for two to three weeks in December in order to accommodate the bill.
“Second, after [the] LDP pushed through the TPP [Trans-Pacific Partnership free trade agreement] without consensus, it is unlikely to do this with the casino IR [integrated resorts] … bill,” the investment brokerage said. “Finally, uncertainty following the U.S. Presidential election could divert attention away from the bill.”
Should Japan decides to allow casinos to operate in the jurisdiction, Morgan Stanley estimates that Japan’s casino market revenue will be “in the range of US$7 billion to US$20 billion”.
Morgan Stanley further stated that if casino gaming were legalized, it expects Japanese authorities to impose entry fees for locals. “Similar to Singapore … there will be an entry fee for locals to deter them from excessive gambling, but the amount is uncertain for now.”
Gambling is officially illegal in the world’s third-largest economy but the betting culture is widespread, most visibly reflected in the pachinko halls—arcade-style outlets where players can win money depending on the games’ outcome—that dot city streets.
Japanese legislators have previously pushed for the legalization of casinos in the country. A similar bill was introduced to the parliament in 2013 but it went to the trash bin the following year after an unrelated political scandal forced to the House of Representatives to dissolve.
In 2015, the bill was once again introduced but it failed to advance in the parliament due to the fierce opposition of anti-casino legislators and the public.