Global Gambling Giants Place High Bets on Japan Casinos

Global Risk & Investigations Practice

June 19, 2014

Passing the hunched denizens of a neighbourhood pachinko parlour late at night, their fingers flying on the pinball-slot machine hybrids that have entranced the country for decades, it is easy to imagine the potential for casinos in Japan.

While gambling for cash is technically illegal in Japan, pachinko operators have managed to skirt this issue through having players win prizes, rather than money (although later traded for cash). There are also exceptions to the law that allow for betting on public sports such as football, horse racing and boat racing and also on the state run lottery, given their promotion of industry, sports and the public good and their raising of funds for local governments.

After nearly 15 years of deliberation it appears that a ban on casinos in Japan may be lifted this year. A number of factors are believed to have contributed to this long-awaited deregulation, among them: The Olympic Committee’s 2013 selection of Tokyo as the host of the 2020 Olympic Games and thus the assumed encouragement of tourism, as well as the “Abenomics” growth programme of economic liberalisation introduced by prime minister Shinzo Abe, who himself reportedly stated in 2013 that there would be “significant merit” in casino legalisation. Mounting government debt and the success of casinos in nearby Macau and Singapore, along with their notable revenue generation, are also believed to have spurred fresh hopes for a casino industry’s potential to assist in the revitalisation of Japan’s economy. From the casino operators’ viewpoint, Japan’s wealthy population renders it an enticing market, as does its geographical position to China, where some of the world’s most prolific gamblers are based.

Key Players and Local Partners

Global gaming industry giants are already seeking entrance into the potential Japanese market, with major players such as Wynn Resorts Ltd., MGM Resorts International, Las Vegas Sands Corp. and Caesars Entertainment Corp. announcing sweeping plans for investment. Not surprising given the benefits as highlighted by a senior source within one of these companies, “There isn’t a hugely competitive local set of players, it’s going to be well-regulated, and it’s a rich country.”

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