Casino Developers Will Have to be Patient on Japanese Regulation, Says Analyst
Posted on: February 23, 2017, 03:00h.
Last updated on: February 23, 2017, 01:53h.
Global casino operators are bending over backwards to get a piece of the future Japanese casino industry, but they may have to wait just a little bit longer.
The Japanese Diet passed its Integrated Resorts Promotion Bill in December, after years of mulling the issue, paving the way for the opening up of a market with the potential to become the second biggest in the world, after Macau. But Japan has not regulated casino gaming, not yet, at least.
The Integrated Resorts Bill was an enabler, giving the Diet a 12-month deadline to prepare a framework of regulation, which will lay down licensing requirements and measures to protect problem gamblers from using casinos.
No Movement in Spring
With the Diet’s ordinary session getting underway nice and early, on January 20, it was hoped that process would begin soon, but not so fast, says Union Gaming Analyst Grant Govertsen. There is unlikely to be any movement on regulation during the spring session, he said in a note this week.
“Rather, we think the Diet has already made the decision to handle the IR bill during the fall special session, suggesting that it is more likely going to be an October or November event,” Govertsen said.
Prime Minister Shinzo Abe’s ruling Liberal Democrat Party (LDP) was accused by the opposition of rushing the IR bill through and, as such, it remains highly contentious.
While it has overwhelming support from Abe and the LDP, which has control of both houses, it was vociferously opposed by opposition parties who felt its social and economic repercussions and been insufficiently debated.
Meanwhile, there is scant public support for bill. An opinion poll recently found that 44 percent of Japanese opposed it, with just 12 percent in support, and 34 percent undecided.
In short, in the light of past criticism, the LDP doesn’t want to be seen as taking its regulatory responsibilities too lightly and is prepared to take the long view. Which means, as the likes of LVS and Melco-Crown ardently pledge their billions, we’re still uncertain exactly how many licenses will be created and under what terms.
The bidding process, when it arrives, is likely to be fierce, with perhaps just two or three licenses up for grabs, and Japanese companies are expected to be involved each venture, linking up with foreign developers to form consortiums.
Govertsen believes that the process will probably come in two stages: a request for proposal from eager potential host cities, followed by a separate request for proposal from potential operators.
However, there could be a scenario where a city links up with a consortium and they bid jointly against other cities and their consortiums, he said.
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