Japanese legislators are in the process of putting together a new bill outlining the gaming regulations that will govern the newly approved casino industry. The government has commissioned a team of advisors to study the industry, compile best practices and put together a robust policy that will be the basis integrated resorts (IRs) to operate in the country.
Integrated Resorts
The new gaming regulations will specify how many casino licenses will be issued initially, the potential locations for the IRs, the licensing fee for each application, the stipulated criteria that each casino operator must meet to be eligible to apply for a license, the gaming taxes that will be levied on these operators and measures to address problem gambling and money laundering.
Casino operators from all over the world are eagerly waiting for the regulations to be released as all the top operators are interested in applying for a casino license in Japan. The Las Vegas Sands Corp, Wynn Resorts, Crown Resorts, MGM Resorts, Hard Rock International and Melco International are just some of the operators who would like to capture a piece of the Japanese market which analysts estimate will be over $25 billion.
Although no official information has been released with regards to the proposed regulations, there are reports that Japan will initially commission only two IRs and the locations will most likely be in top locations such as Tokyo and Osaka. International operators will most likely have to team up with local firms in order to bid for a casino license and will have to form a joint-venture to develop these IRs.
Casino Conference Highlights Concerns
The Japan Tourism Research Association recently conducted a meeting that was attended by a number of international casino operators who discussed their views and highlighted their concerns regarding the proposed regulations that Japan might implement for the casino industry. The event was also attended by many local firms who are interested in tying up with international operators to bid for the casino license.
Daniel Cheng who is the senior VP for business development in Asia for the Hard Rock Hotel & Casino made a presentation highlighting a number of issues that most casino operators are concerned with. The biggest concern raised was that the advisory team had suggested that the government team up with private operators and bid for the casino license. Cheng pointed out that such a move was unprecedented in the casino industry as both parties had a conflict of interest.
Clash Of Interests
Cheng said that the government had to rank social responsibility as one of its key priorities whereas a commercial firm like a casino company had to put profitability and the interests of its shareholders as its key priority. If it became mandatory for both parties to collaborate and run an IR – then it could create a number of issues.
In his presentation, Cheng went on to say that casino operators would prefer a “separation of the political and commercial process; a single standard applied in the bid process; clear articulation of the meaning of an integrated resort licence; and an RFP conducted only for selected locations.”
Inexperienced Advisory Team
The big concern for Japan’s casino industry right now is that the current team of advisors does not have practical experience in running a casino industry, since Japan has only recently lifted the ban. This lack of experience on the advisory committee is another concern for casino operators which was highlighted by Jane Tsai – CEO of JCT Holdings, a consulting company to the casino industry.
Tsai pointed out that Japanese lawmakers have put down a vision for the casino industry that is not very practical. Legislators believe that the casino industry will boost tourism in the country as the primary customers for these IR’s will be foreigners. However Tsai pointed out that more than 80 percent of patrons to these newly opened IRs will be locals and not foreigners. This would automatically increase the odds for problem gambling in the country, which is a huge concern for Japanese legislators and must be addressed appropriately.
Tsai stated that for Japan to be successful, the government had to engage a team of experts who have practical knowledge of running billion dollar IRs who could then serve as their advisers and put together a robust policy. She also pointed out that instead of following business models that Las Vegas and Macau had adopted, Japan was in a unique position to create a new business model that would not only serve the brick & mortar casino industry but also cover the e-sports and skill based gaming industries.

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