Last week, reports surfaced that there are pending gambling changes in Japan in anticipation of launching casinos in the country. One of the last subjects to be decided by the ruling parties was how much casinos would be taxed, but that debate has now come to a close. The two parties last Friday reached an agreement on taxes, as well as the size of gaming space in relation to resort space.
The Liberal Democratic Party (LDP) and the Komeito Party agreed that casino revenue would be taxed a flat rate of 30%, according to reports. They also decided that the gaming floors of integrated resorts (IR) would be limited to 3% of the overall IR space. This latter decision was designed to appease pro-IR legislators.
Komeito had previously wanted an incremental tax rate. It proposed a 30% rate that would subsequently increase to 50% based on a certain level of income. The LDP pushed for, and won, the flat 30% tax rate.
The gaming floor size limitation is apparently not very well defined. There has been no clarification on what overall IR space is in order to calculate the 3% destined for gaming. A previously discussed limit of 161,458 square feet (15,000 square meters) has been completely rejected.
One additional component to readying the gaming industry was to decide on how many casinos could be built. Many local governments had hoped to be able to see construction of gambling operations on their home turf. However, in the end, only three governments will see any gambling action. Those three have yet to be determined and will be decided based on application submissions.
The ruling coalitions also established a period of seven years for reviewing legislation. This is in contrast to the ten years that was initially considered. This could be considered, at least for some local governments that don’t receive casinos in the first round, as a glimmer of hope. Instead of having to wait ten years for lawmakers to consider allowing more casinos, they will now only have to wait seven.
One of the issues that still has to be decided is the subject of entrance fees. Komeito has asked for a $75 fee, while the LDP would prefer to see it set at $48. Other legislators have proposed an even lower fee, pushing for only $19.
