Japanese Casino Legislation Moves Forward
Gambling institutions worldwide enjoyed a bump in share values following Japanese Parliament’s approval of a much anticipated gambling bill in favor of the legalization of casinos for the island nation.
The recent announcement could all but seal the deal in terms of legalized gaming and open the doors for a much needed boom in interest from investors and tourists alike. Taking figures from other gaming destinations, CSLA analysts estimate the industry could generate as much as $40bn a year.
The news has casino institutions such as Las Vegas Sands, whose share rose 3%, and both Wynn and MGM resorts, who enjoyed a 2% increase following the parliamentary decision, very excited at the prospect of new territory to spread their influence. Macau operators are especially pleased with the news of another gambling hub opening in such close proximity to already established operations.
The idea of legalized gambling is not a new one in Japan. The prospect of legitimizing casinos has been a topic of fierce debate in parliament since as early as 1999. Among the chief concerns from opposition are the perceived social problems that would arise with the legalization of gambling and casino culture.
Games in the Spotlight
While there are some forms of gambling currently in place in, such as pachinko, the practice of wagering real money on games of chance has long been taboo.
The most popular game in Japan, Pachinko is a pinball-style game played vertically. Ball bearings are launched with a lever and sent screaming to the top of a game board pocked with metal pins and pockets of varying values waiting to catch fortune fated balls. Players watch with anticipation as their hopes are dashed with an uneventful fall or rewarded with a beneficial landing in a high-paying pocket. Despite Pachinko being illegal, it is tolerated and gambling parlors dedicated to the game are located throughout the nation.
The game works around legislation by having players ‘rent’ out the balls used to play rather than buying them outright. Not only this, but prizes take the form of goods rather than cold hard cash since cash prizes are illegal. So, when a player has accumulated enough balls through play, the balls are turned in for a prize. These special prizes are then taken to a second location where the corresponding item can be exchanged for real money.
Lotteries, football pools and public sports do allow some forms of wager to generate income for the national and local governments. Even betting on the racing of horses, boats and bicycles has enjoyed a following in japan thanks to government supported bookmakers. However, it looks as though the new era of gaming in Japan will focus on Blackjack, Roulette, and other iconic casino entertainment.
Concerns from the public
While legislators, operators and those already positioned to reap the benefits of legalized gambling are eager to move forward, polls show that Japanese voters are largely opposed to the idea.
Many associate the world of gambling with Japanese organize crime element, the Yakuza, who are known to operate casinos illegally throughout Japan. The stigma runs deep and has been engrained in Japanese culture for generations.
According to a government survey conducted in 2014 jointly by the Health Ministry and research teams, more than 5 million adults, roughly 5% of the Japanese population at the time, were addicted to gambling. This figure is 500% that found in other countries. Many believe that the legalization of gambling will only further the problem and lead to an increase in gambling addicted adults as well as crime driven by those defaulting on gambling debts.
The phenomena is a social one and as no moral component according to Ichiro Tanioka, president of Osaka University and Japan’s leading gambling scholar. He notes that neither Shintoism nor Buddhism, Japans most prominent belief systems, proscribe the act. Gambling in Japan is among the chief three vices, the other two being drinking and prostitution. As such, Gambling is seen not as a moral issue in Japan, but one of practicality. The act of gambling itself is not seen as the problem for most Japanese citizens, but rather the debt and crime that result from it.
Benefits at Home And From Abroad
Gambling will not be the only boon to the Japanese economy following the passage of recent legislation. Jobs in the trades and hospitality will surge as a result of increased construction and the need to fill hotel and resort positions. Large-scale casino and resort projects will provide these jobs for years to come and the promise of big-spending players from inside of Japan and abroad have many operators wringing their hands in anticipation.
Prime Minister of Japan Shinzo Abe looked upon the prospect favorably in light of Japan receiving the 2020 Olympic bid. In addition, he remained hopeful the forecasted economic growth would make up for areas of industry where Japan had fallen in performance to foreign competitors, highlighting China and the consumer electronics sector.
The benefits won’t stop at Japan’s borders. International investors already have their eyes on the industry, with Las Vegas gaming magnate Sheldon Adelson reportedly willing to invest as much as $10bn in development.
Chief Executive of the International Casino Institute, Takashi Kiso offered his advice to prospective organizations looking to get in on the market by warning them that ownerships will most likely be shaped in joint ventures between foreign and domestic gambling companies. He cautioned that there was a substantial resistance to the idea of 100% foreign owned casinos on Japanese soil and that parliament would most likely rule out the possibility of such agreements.
Grant Goverston, a Union Gaming research analyst, offered a very favorable outlook on gaming in Japan, stating, “For the investment community, Japan is seen as the crown jewel of Asian gaming development outside of Macau”. With Macau revenue growth exceeding estimates in Q3 of this year and topping out at $2.3bn for September alone, the news has everyone’s attention. However, the investment community will have to hold their horses. The passage of legislation won’t outright legitimize the practice of gambling in Japan and open the doors for construction on new casinos, but rather it will begin the process of outlining regulations for the industry.
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