Japan Details Integrated Resort Evaluation Plan as Submission Period Begins
Posted on: October 5, 2021, 02:33h.
Last updated on: October 5, 2021, 04:23h.
Japan opened its bidding window for the country’s three integrated resort (IR) licenses last Friday, October 1, 2021, at 9:30 am JST. In anticipation of at least three submissions, central government officials have publicly released information detailing how the schemes will be evaluated.
Japan’s Casino Regulatory Commission (CRC) is the government agency that is overseeing all elements of the emerging industry. Formally established in January of 2020, the CRC was authorized under Japan’s 2018 passage of its Integrated Resort Implementation Act.
A department within the Ministry of Land, Infrastructure, Transport, and Tourism, the CRC recently told GGRAsia how it plans to grade casino pitches. The committee says each proposal will be studied and scored out of a possible 1,000 points.
A total of 450 points are allocated to how each IR would improve Japan’s overall attractiveness and leisure competitiveness with international markets. Another 200 points are reserved for the IR consortium’s ability to operate such a multibillion-dollar enterprise in a fiscally and socially responsible manner.
One hundred and fifty points are allocated towards how the proposed resort would benefit Japan’s national economy and another 150 points towards how IR pitches plan to prevent gambling problems. The final 50 points are reserved for how a prefecture plans to use its gaming tax revenues.
Subdued Bidding War
When Japanese lawmakers passed the IR bill more than three years ago, it was expected that the world’s largest gaming operators would seek licensure. Budgets upwards of $10 billion per property were floated, and Japan expected a bidding war to ensue.
But the expected bidding bonanza has been greatly subdued because of Japan’s lengthy legislative process and the subsequent pandemic. Now, only three prefectures are bidding on the three IR licenses — Osaka, Nagasaki, and Wakayama.
MGM Resorts is leading the IR consortium in Osaka. Casinos Austria has been selected in Nagasaki, and in Wakayama, Canadian private equity giant Clairvest Group is leading the IR initiative.
Last week, Clairvest announced that Caesars Entertainment would operate its Wakayama IR should it come to realization.
Caesars previously considered leading its own development consortium in Yokohama but folded on those aspirations in August of 2019. Caesars joining Clairvest allows the Las Vegas-based casino firm to have a hand in Japan’s gaming industry after the company notoriously missed out on Macau two decades ago.
Austria Government Involvement
One of the three casino plans being developed in Japan involves a foreign government.
Austria Holding PLC — commonly referred to as OBAG — is a state-owned and managed investment firm that is geared as a national wealth fund in the Central European nation. OBAG controls a 33 percent ownership stake in Casinos Austria.
The largest shareholder in Casinos Austria is SAZKA Group, a publicly-traded lottery, gaming, and entertainment conglomerate based in the Czech Republic. SAZKA holds a majority 59.7 percent position in the Austria casino company.
The Austria government’s participation in the Casinos Austria Nagasaki IR pitch won’t likely raise red flags, as relations between Japan and Austria have long been strong.
“Diplomatic relations were restored in July 1953 by an exchange of notes, after having passed through a period of interruption during the Second World War. Direct flights between Tokyo and Vienna were established in 1989 (a joint service between Austrian Airlines and All Nippon Airways), which contributed to accelerating bilateral exchanges,” explains Japan’s Ministry of Foreign Affairs.
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