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Uncertainty Looms over Japan’s Casino Expansion Following Reduced Interest in Integrated Casino Resorts’ Development

The latest moves of city and prefectural authorities in Japan have changed the expectations for the three casino licenses that the country’s Government was willing to hand down as part of a larger effort to revitalize local economies.

In April, the Wakayama Prefectural Assembly announced its decision to withdraw from the competition for the casino operating permits, leaving Nagasaki and Osaka as the only two contenders for the licenses. This undermined the initial plans of the country’s Central Government to issue three casino licenses in an attempt to attract more foreign visitors to help it bolster the financial flows to the Treasury’s coffers.

As CasinoGamesPro reported at the time, the longstanding concerns associated with the financing of the envisioned ¥470-billion project at Wakayama Marina City, made more than half of the Prefecture’s assembly members vote against the proposal. Although the project was supported by some prominent local politicians, 22 of the 40 assembly members voted against it, so the potential of making an official bid for the integrated casino resort was slashed, leaving Osaka and Nagasaki the only locations to be competing for the casino operating permits.

Previously, the Central Government of Japan revealed it was preparing to select up to three locations to host the first casino resorts in the country. The interested parties had until April 28th to file their applications for the licenses.

Unfortunately, the withdrawal of Wakayama from the competition means further turbulence and uncertainty when it comes to the selection process and the future of integrated casino resorts in Japan in the longer term. On one hand, it remains unknown whether the country’s authorities would bring some changes in their initial plans for the local casino sector or would proceed with the evaluation of two applicants only. At the time when the liberalization of the Japanese casino sector was officially announced, some Government officials have noted that the intention to hand down 3 casino licenses did not necessarily mean that three operating permits would be awarded.

Nagasaki and Osaka Left the Only Applicants for Casino Operating Permits

Considering the fact that the establishment of a casino resort has been expected to act as a catalyst for regional development, the Governor of Wakayama – Yoshinobu Nisaka – was disappointed by the decision of the assembly members to no longer support the multi-billion casino resort project. At the time, he said that in his opinion, Wakayama Prefecture should make another attempt to host an integrated resort (IR) in case the Central Government decides to hand out more casino licenses or accept more casino project applications.

Previously, the addition of legal casino venues has been described by some Government officials as an excellent opportunity for the country to further develop its tourism industry.

As mentioned above, the withdrawal of one of the three major contenders for the first three casino operating permits has put the other two applicants in the spotlight.

As CasinoGamesPro reported at the time, the rejection of Wakayama to proceed as part of the casino license bidding process came only a couple of days after the Nagasaki Prefectural Assembly officially approved a project involving the development of an integrated casino resort in Sasebo. The project is headed by Casino Austria International Japan Inc. If given approval by the Government, it is expected to start operation in the autumn of 2027, with about 6.73 million people set to visit the resort every year. The planned integrated casino resort is expected to generate annual revenue of more than ¥271 billion by fiscal 2031.

On the other hand, the project unveiled by the other applicant – the city and prefecture of Osaka – has long been backed by the local Governor Hirofumi Yoshimura and the city’s Mayor Ichiro Matsui and was officially approved in March. The planned casino IR will be led by a consortium formed between MGM Resorts International and Orix. It is set to be established on the artificial island of Yumeshima and start operation around the late 2020s.

Mayor Matsui has commented that the withdrawal of Wakayama from the bidding process would not affect Osaka’s plans to participate in the bidding process but still, it remains to be seen how the decision would affect the further actions of the Central Government. Now, a Committee of experts is reviewing the submitted integrated casino resort plans and their financial viability, as well as the proposed measures to deal with potential gambling-related harm and problem gambling rates. So far, there has not been any schedule for the competition of the review, with the official decision on the applications of Nagasaki and Osaka expected to be made in the second half of 2022.

 Author: Harrison Young

Harrison Young is an experienced writer, who started his career almost 8 years ago. Prior to joining our team at CasinoGamesPro, he worked as an editor for a small magazine.