August 26, 2021 4 min read

Japan Might Not Initially Approve Three IRS as Previously Expected

Several years ago, when Japan’s ruling Liberal Democratic Party (LDP) found enough support for its plan to introduce integrated resorts (IR) to the country, excitement was very high. Casino operators from around the world immediately jumped at the opportunity to be part of the new market, with most larger – and a few smaller – operators scrambling to decide on their targets and open offices. There would be three IRs approved by the government in the first round and competition was going to be fierce. That’s no longer the case, however, and, according to some experts following the developments, Japan might not initially approve three locations. It might not even approve one.

Japan’s Clouded IR Future

To say that the LDP’s lofty goals of bringing large casinos to the country have been mired in controversy would be an understatement. The LDP fought for support from the start and, as soon as lawmakers squeaked through with approval of the new legislation to allow IRs, there were issues. Accusations of bribery on the part of government officials surfaced that were later confirmed to be true, and things have been going downhill ever since.

Gaming operators, once spending millions of dollars to be a part of Japan’s gambling future, began pulling back. This was partly due to COVID-19, but also partly due to growing resistance. Yokohama was determined to host an IR, but that is no longer the case. Tokyo, another consistent frontrunner, might also be pulling out. That would leave Nagasaki, Osaka and Wakayama as the three primary locations for the three IR licenses Japan would issue in the first round of development.

That might not happen, though, and Japan could even decide not to issue a single license. In speaking with GGRAsia, industry consultant and managing director of Bay City Ventures Joji Kokuryo asserts, “Osaka, Wakayama and Nagasaki and their IR partners will each have to earn national approvals for their IR development plans. Of course, the first phase of approvals will have to come from the actual applications, but by no means will all three be approved just for making submissions to the national government. There could be zero, one, two, or three IR development approvals given.”

Delays Cause Interest to Wane

Initially, it had been expected that Japan would name the potential host cities or prefectures last year. That was later changed because of the COVID-19 pandemic and, now, the final decision won’t be announced until next April, possibly later. This two-year delay has caused operators to see the future in a different light and has also allowed opposition to the IR program to increase. However, it has also raised a potentially new scenario that could shift Japan’s plans even further, leading to new delays.

Genting Group is reportedly out of the race for a Yokohama casino as the city welcomes a new mayor, but has said it could consider other options in the country should the opportunity arise. According to Daniel Cheng, an industry executive who, among other positions, previously worked with Hard Rock International to enter Japan, believes that new locations could emerge, but this could lead to further delays in the entire IR approval process. He told GGRAsia, “A six- or 12-month delay and an endemic [COVID-19] environment may be conducive for other host candidates to emerge: Hokkaido, Aichi, Fukuoka, Tokyo – each location’s micro-factors permitting.”

There is still a lot of work to be done for Japan’s IR scheme to achieve success. However, after having spent roughly 20 years trying to bring the plan to life, it’s highly unlikely that the country nixes the idea completely, despite objections. Many view the concept as a way to increase international tourism, which equates to more jobs and more economic prosperity. Eventually, Japan will see its IRs, but the timetable will continue to shift for now.

Author

Erik brings his unique writing talents and storytelling flare to cover a wide range of gambling topics. He has written for a number of industry-related publications over the years, providing insight into the constantly evolving world of gaming. A huge sports fan, he especially enjoys football and anything related to sports gambling. Erik is particularly interested in seeing how sports gambling and online gaming are transforming the larger gaming ecosystem.

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