Casinos didn’t Bet on How Hard it Would be to Crack Japanese Market

Casinos didn’t Bet on How Hard it Would be to Crack Japanese Market

Casinos didn’t Bet on How Hard it Would be to Crack Japanese Market


Though casinos all over the world are a smashing hit for tourists and locals to try their luck on winning money. However, no one ever cracked the Japanese market. Japan is known as a potential US$20 billion gaming market and casino executives are beginning to question whether that jackpot is worth all the trouble.


In 2016, Japan legalised casino gambling and it was a great excitement in the industry. Companies including MGM Resorts International and Las Vegas Sands Corp have spent heavily to get access to a gambling market that could become Asia’s second-largest after Macau.


Even so, the enthusiasm did not last long. After three years, a number of casino executives who declined to speak publicly because of the sensitive nature of the casino approval process, told Bloomberg News that other markets that have built gambling industries are much easier to process compared to Japan gambling industry. At least one company, Caesars Entertainment Corp, has pulled out.


Gaming operators are becoming frustrated by unclear tax and gaming policies, as well as delays that are likely to push the opening of any casino beyond a 2025 target. A lack of interest among local governments and companies, as well as residents’ worries about addiction and crime, is also slowing the process.



While most casino operators are still pursuing Japan resorts, the difficulties are complicating the calculations for the potential costs and eventually payoff associated with a Japanese integrated resort.


Bloomberg Intelligence contributing analyst David Bonnet said: “There’s so many different hurdles, it’s called into question the feasibility of these projects.” He also said: “You have this element where it’s ‘hey we passed this law’, but no one wants to embrace it, and that’s the biggest issue.”


Opting instead to focus on its current businesses and a merger with Eldorado Resorts Inc. , Caesars gave up on a Japan casino in August 2019. When Hokkaido said last month it wouldn’t pursue a bid in the current round for a license, other plans that have been carefully laid out were suddenly suspended. The region in northern Japan was considered one of the top places to host a casino, with Hard Rock International actively seeking to establish a resort there. When the news was out, Japan’s Chief Cabinet Secretary Yoshihide Suga declined to comment on the decision, but said he would like to see casinos open quickly so their benefits can be realised.


Japan’s second largest metropolitan hub of Osaka has been the furthest in the process of selecting an operator, they hope to use an integrated resort as part of its efforts in hosting the World Expo in 2025. Yokohama, just south of Tokyo, has also raised its hand, but faces vocal opposition from its residents.



Japanese businesses have also been lukewarm in providing crucial support or financing for the plans. An estimation of US$10 billion or more was made by operators to build out large integrated resorts with hotel and meeting spaces.


Las Vegas Sands president Robert Goldstein compared that cost for a single casino in Japan against developing several locations in China for the same price. Mr Goldstein said on a call: “No matter how good you are at this business, that must give you pause and stop and think, ‘Is that prudent? Can you really deploy, can you get the return.’”


In the past month, the national government floated and then shelved a proposal to tax foreigners’ gaming winnings. In Macau or Las Vegas, such a practice does not take place and it would have created a major burden for casino operators.


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