The ongoing liberalization in Japan persists.
In Japan, the process of allowing land-based casinos is advancing, with Prime Minister Shinzo Abe signing a law amendment in March to officially permit the creation of several casino resorts. The focus now shifts to Osaka, the first city to apply for a license to create a casino. Regulations for casino operations are also being developed. Here's a summary of the recent developments.
Osaka's Bid for Casino License
With a population of about 2.6 million, Osaka is the first major Japanese city to apply for a casino license. The local government will select a consortium to evaluate the conditions for constructing the casino based on specific criteria. To secure the license, potential international casino companies like MGM, Caesars, Melco, and Mohegan must win over the local authorities by demonstrating their business models.
US gambling magazine Forbes called the competition a "race" due to the limited number of licenses available. MGM Japan CEO Ed Bowers recently discussed the complications of the process and stressed the importance of Osaka's support. According to him, "Osaka needs several prerequisites: a large population, both locals and tourists, infrastructure, and political support. Osaka has repeatedly expressed its desire for land-based casinos. No matter where you are in the world, this process is challenging, and you can't be successful if you don't have political support."
MGM announced its "Osaka First" strategy at the beginning of January, partnering with Japanese financial services provider Orix. The company is receiving support from Galaxy Entertainment Japan manager Satoshi Okabe, who is best known for his operations in the gambling hub of Macau. Okabe stated:
"We believe that major cities like Osaka offer the best opportunities for the development of large-scale land-based casino resorts, similar to what we have done in Macau. We want to develop them there as well."
Osaka's Attractiveness
The city of Osaka, located in the Kansai region with a population of 19 million, is the third-largest city in Japan. It is also considered an international metropolis and a major tourist destination, recording over 11 million foreign visitors in 2017 alone. Economic experts predict gaming revenue in Osaka could surpass $5 billion annually. Forbes also notes that Osaka is known to be "entrepreneurial, risk-taking, friendly, and more relaxed than Tokyo." Tokyo is also preoccupied with hosting the 2020 Summer Olympics.
Fukuoka-Kitakyushu, with a population of 5.5 million, is considered a possible contender for the next license. For now, Osaka remains the only significant player in the race for a license.
Strict Regulations Expected
Although the market holds promise, Japan is a newcomer to the gambling industry and adheres to strict anti-gambling legislation. The country's Buddhist culture has historically influenced this aversion to gambling. With increased demand from the population and influence from Western industrialized countries, Japan is opening the sector for the first time but with strict regulations.
These regulations will likely involve limiting gambling areas and restricting entry fees for Japanese citizens. The Japanese government aims to prevent gambling addiction from becoming a major social issue. Due to the unclear regulations, the license process is expected to last until 2020. Construction will carry on until at least 2023-24, followed by a seven-year evaluation period.
Competitors at Work
Since Abe approved the law amendment, various international casino companies have been actively positioning themselves to receive a license. MGM, with its partnership with Orix, is one of the leaders in this effort.
A Florida-based company called Hard Rock announced in early January that they're planning to open a casino in Japan. It's still unclear which company will ultimately come out on top and whether or not Osaka will become the nation's first-ever gambling hub.
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Source: www.onlinecasinosdeutschland.com
