Speed of Japan casino law passage surprised even supporters of bill

Global gaming companies, such as Las Vegas Sands and Hard Rock International, recently flew top executives into Tokyo to declare they are ready to invest in developing resorts in Japan, an enthusiasm triggered by the government’s plans to change current laws that forbid casino gambling.

The speed at which Japan’s government moved in December to pass the first piece of legislation on gaming surprised even supporters of the casino plans. The government is now working on a second bill to hammer out more details.

The pace of the bill’s passage was “like a thunderbolt from the sky,” said Takashi Kiso, who runs a company providing gaming industry consulting services.

With a poll by the Yomiuri Shimbun, Japan’s biggest daily newspaper, indicating two-thirds of respondents opposed the legislation and just one in four were in favor, Kiso says Japan needs a broader and more inclusive debate about the issue.

“We did not seize the opportunity to have a proper discussion with those who are against the legislation,” said Kiso, who heads the International Casino Institute.

However, he said that as the media’s attention shifted from the bill to specific issues, public support could build. He argued a substantial portion of revenue from the resorts would go towards intermediate providers of goods and services, labor, and tax.

Meantime, public concerns about casinos include adding to the ranks of problem gamblers if Japan becomes the next Macau or Las Vegas as well as potential links to organized crime.

Those issues are what bothers Shizuoka University Professor Yoichi Torihata, who opposes the casino law and made his case against Kiso during a debate at the Foreign Correspondents’ Club of Japan on Tuesday.

Much is hanging on this argument. As investment bank CLSA estimates gaming revenue in Japan could surpass US$25 billion a year, Japan’s government wants investment in the so-called integrated resorts.

They would include casinos, hotels, entertainment and sports venues, which the government argues will attract tourists, revitalize regional economies suffering from a population drain, and produce much-needed tax revenue.

Read: Edward Tracy takes Hard Rock on a Japanese gaming mission

Sheldon Adelson’s Las Vegas Sands Corp. has said the company could spend as much as US$10 billion on such facilities in Japan. Melco Crown Entertainment Ltd. which operates in Macau said the opportunity in Japan is too good to miss.

Casino opponent Torihata said there is a downside to all this in that gambling addictions can destroy lives. He argues that Japan doesn’t need to add to the problem gamblers it has in pachinko – a pinball-style game people on many street corners that offers cash payouts — as well as horse and bicycle racing.

Torihata said about 5.4 million Japanese, or 4.8 per cent of the population, suffered from gambling addictions, and he believed the number would rise if casinos were built.

“I’ve heard many personal stories of lives destroyed by gambling,” he said, adding that this is why there is such public opposition.

The casino issue did not merely split public opinion; it also prompted divisions within Prime Minister Shinzo Abe’s ruling coalition government.

The bill that passed in December was sponsored by lawmakers mainly from Abe’s Liberal Democratic Party, but the junior coalition partner Komeito, which was founded by members of a Buddhist-related group, allowed its members a conscience vote. Komeito leader Natsuo Yamaguchi was among those to oppose the bill in the upper house.

The bill requires related legislation to be drawn up within a year to set rules on dealing with problem gambling, selection of locations and casino operators.

Torihata argued that the Asian gambling market was already saturated, meaning that the “real target” of foreign casino operators was the local population. He said strong restrictions and regulations are needed, including a Singapore-style ban on television advertising.

Edward Tracy, the CEO of Hard Rock Japan who has more than 30 years experience running gaming and entertainment facilities, said problem gaming is something that American companies in particular have taken really seriously.

“There have been a lot of measures taken by the industry in education programs, such as how to spot it if you are an employee and having solutions for the individuals,” he said in an interview in Tokyo.

Gambling is already happening so the benefit of strong legislation is that it brings it to the surface, it isn’t underground and it’s highly regulated, he said.