Indeed, Japan is already one of the largest gambling nations in the world, with activities such as horse races, bicycle races, speedboat racing, lottery, pachinko, motorcycle racing, football pools, and number lotto. According to the Ministry of Health and Welfare, the number of people with a gambling addiction tops 5.3 million, which is 5 percent of the adult population. This is the highest problem gaming rate in the world and this has become a serious social problem.
In December 2016, the Japan Diet passed the Integrated Resort Promotion Bill, and the country is moving towards casino gambling. Yet more than 60 percent of the population is opposed. Certainly one of the reasons is that they are afraid that the number of pathological gamblers will increase; but more importantly, they feel that Japan has more than enough gambling venues already and there is no need to add casino gambling.
The process of legalizing casino gambling in Japan is ongoing, but a lot of difficulties lie ahead. The next step: the special task force that was established within the Cabinet Office is preparing a draft of the Integrated Resort Implementation Bill.
If this bill is passed by the Diet, Japan will seriously move towards establishing a casino gambling facility; but in Japan, it is not possible for private enterprises to open construction facilities freely like in the U.S. In Japan, rather than private companies, city or prefecture governments, such as the local government of Tokyo, Osaka, Yokohama, Chiba, etc., must apply for an operating license as well as permission to develop an integrated resort (IR) facility. Local governments will choose the private companies they wish to partner with on development location, and will apply to the administrative committee within the central government, as stipulated in the aforementioned Integrated Resort Implementation Bill, and if permission is granted, development will finally begin.
For the first time in 56 years, the Olympic Games will be held in Tokyo in 2020, and construction work is now being carried out here and there. A few years ago, there was also a plan to start IRs at the same time as the Tokyo Olympic Games, but due to the opposition to the IR bill and the election that was held in the National Assembly, the passing of the IR promotion bill was delayed, and that plan is no longer possible.
Now potential IR development is being touted as an aid for a world exposition that is scheduled for 2025 in Osaka. The plan is to develop, construct and open a casino in Osaka at the same time, in hopes of increasing the number of foreign tourists. Osaka City is already actively promoting this plan widely, while also exchanging information with Las Vegas Sands Inc. Las Vegas Sands Chairman Sheldon Adelson stated his company would spend up to $10 billion on a Japan IR development.
However, there are two points that cannot be ignored when regarding legitimization and realization of casino gambling in Japan. First, progress is greatly affected by the political situation; specifically, the fact that more than half of the population opposes the introduction of casino gambling. During an election campaign, candidates who oppose casino gambling are certain to get more votes. That applies not only to the mayors and governors of local governments, but also to local council members. Once elected into office on that promise, the candidate will no longer be able to promote casino gambling.
The mayoral election in Yokohama is a typical example. Originally the mayor was all for introducing IRs into Yokohama, but recently her remarks have begun moving in the opposite direction for fear of losing votes in elections. Politicians and elections will be a key phrase that will determine the progress of casino gambling in Japan.
The second issue is the problem of gambling addiction. Japan has pachinko, its own slot-like pinball gambling machine. There are over 11,300 pachinko halls nationwide, and more than 11 million people play the game annually. Total annual sales is JPY21 trillion (approximately $190 billion). The surprising fact is that this figure is approximately four times the annual total casino revenue of Macau, which currently leads the world in casino gambling revenues. Gambling addiction caused by pachinko has been repeatedly taken up as a serious social problem in Japan, and opponents argue that approving this casino gambling legislation will only add to the problem.
In response, the Japanese government is currently attempting to pass a gambling addiction prevention measure separately in advance of the Integrated Resort Implementation Bill. But if the bill does not provide sufficient measures, public opinion will not be favorable.
There are many delicate factors still to be considered; thus casino gambling in Japan faces an uncertain future. We should accept the fact that investing in the Japan casino market is currently a risky bet. It’s a gamble.