Japan’s Casino Regulatory Commission May Reopen Applications for Remaining Integrated Resorts

Japan

The plan was to create three integrated resorts (IR) in various strategic sites around Japan. The Osaka, Yakushima project is moving forward after gaining the necessary certifications in 2023, but the two other new casinos in Japan still need to be planned. The development of integrated resorts in Japan has faced several challenges and objections throughout the years, but significant milestones have been reached through successful lobbying. It makes sense that the Japan Casino Regulatory Commission is reconsidering its strategy for pursuing the licensure of the remaining two IRs. The proposed integrated resorts, which would comprise upgraded shopping and entertainment outlets, luxury hotels, and casino floors, have the potential to benefit the country’s economy and tourism.  

Refusal of Nagasaki IR Project 

In 2021, the national government approved three IR licenses, allowing prefectures to propose integrated resorts in their municipalities. Only four cities submitted bids: Yokohama, Osaka, Wakayama, and Nagasaki. Yokohama withdrew after electing an anti-casino mayor in 2021, while the Wakayama prefectural parliament rejected plans for an integrated resort in 2022. Nagasaki filed their bid at the same time as Osaka in mid-2022 however, the Ministry of Land, Infrastructure, Transport, and Tourism and Japan’s Tourism Agency declined their application in December 2023. The Nagasaki rejection was unexpected, given Osaka got clearance despite scoring only 66% on the casino district plan. 

The Nagasaki governor, Kengo Oishi, voiced his surprise at the decision, saying, “The announcement came as a surprise, and I’m yet to understand the reason for declining our application. Nagasaki meets all the requirements to host an IR resort, and it could have worked as a catalyst for regional economic stimulation in the greater Kyushu region by attracting more tourists.” The governor hinted that the project would have benefited the city and its hinterland, Honshu, the country’s main island. 

Renewed Interest In Wakayama, Hokkaido, and Tokyo

The Japan IR Development Act grants approved districts a license to develop the IR a ten-year validity period. Following expiration, the district is granted another five-year renewal period. Casino licenses for the integrated resort are initially valid for three years from the start of operations, with the option to renew for another three years. These conditions are deemed very favorable and have encouraged many additional bidders. However, the administration has already stated that it prioritizes strategic locations that will facilitate regional economic revival. 

Tokyo had previously emerged as an attractive location for many investors, but the local administration needed more interest. Initially, the Tokyo prefecture set aside a moderate fund to investigate the viability of pursuing an IR project. Industry experts ascertain that Tokyo’s interest in hosting an IR depends on who is in office. Therefore, the next elections in September 2024 will be critical in establishing Tokyo’s stance.
Hard Rock, a multinational casino powerhouse, expressed interest in developing an IR project on Hokkaido island but eventually withdrew after the prefecture declined to bid. However, following the rejection of Nagasaki’s candidacy, Hokkaido is considering a bid due to widespread grassroots interest. An IR policy study work group has already been formed to investigate the feasibility of an IR on the island, a popular tourist destination. Wakayama is the city that is more eager to obtain a license than any other authority. Nonetheless, they face substantial challenges, as their previous proposal provoked contentious internal politics, resulting in the rejection of their initial IR development plan in the final approval phases.          

Future Prospects for Additional IRs In Japan 

Despite the rejection of Nagasaki IR, Japan is in a solid position to seek the remaining two licenses now that the country’s Casino Regulatory Commission is fully operational. The commission’s yearly budget was increased to JPY3.7 billion for the fiscal year 2024. It is still being determined when the application window will open. Still, it is expected to happen soon, and jurisdictions that have previously had their bids rejected will be allowed to reapply. The national government will most likely follow the tourism agency’s recommendations to open the bidding window.   

Final Thoughts

Learning from Nagasaki’s declined proposal, other cities vying for an IR license will undoubtedly trim their bids to meet government standards when the bidding window opens. According to Japan-based casino regulation specialists, the financiers disclosed in the Nagasaki proposal significantly influenced the rejection decision. Such investors are extensively scrutinized to ascertain their identity, source of money, and ability to make long-term monetary contributions. The global casino industry is closely monitoring Japan’s progress in the integrated resort sector and speculating whether Japan will complete its plans before neighboring Asian nation Thailand secures approval for integrated resorts.

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.