Japan

Research Brief: Paving the Regulatory Future for IRs in Japan – May 2021

As the world continues to face numerous challenges and rebounds from the pandemic, most countries around the world remain closed to outsiders. Japan and others throughout Asia are trying to find a way to reopen but have had to implement new restrictions and emergency orders. In Japan, these have been most recently extended until the end of May in numerous parts of the country. This is further complicated by the upcoming Olympics and the inability to host foreigner visitors to the market. Olympic-sized problems surround this event in terms of not just the general logistics of hosting the Games, which were supposed to be a shining moment for this proud country, but also the public sentiment that is growing against hosting the games. A recent online petition had hundreds of thousands of signatures calling for the cancellation of the event, with at least nine of Japan’s 47 prefectural governors concurring with the petition. These issues further cloud Japan’s recovery in general terms and with regard to the hospitality industry, especially on the tourism goals established by the government.

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2020 Trends: Japan

Like the rest of the world, the development of integrated resorts in Japan has been significantly stalled because of the Covid-19 pandemic. Japan is just beginning to reemerge as it is now starting to allow foreigners back into the country. While many speculated that 2020 would be a robust year for the integrated resorts, it looks like Covid, like the rest of the world, will push IRs back into 2021 as things finally start to move down the road.

Earlier this year, Japan transitioned from Prime Minister Shinzo Abe stepping down for health reasons to the current Prime Minister Yoshihide Suga. Suga, who was Abe’s top lieutenant, has been a strong proponent of the integrated resorts initiative. His ascendancy was the ideal outcome in terms of the succession from Abe. Suga will not be a caretaker prime minister and wants to leave his own stamp over the next year coming into a fresh election next September.

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Research Brief: Japan’s IR Opportunity

Given these unprecedented and uncertain times, many questions continue to be raised as to how the process of integrated resorts in Japan may be affected by the ever-changing events surrounding the coronavirus (COVID-19) pandemic. As seen by government actions around the globe, this virus has not only affected Japan, but the rest of Asia, the United States, the Americas, and the world. China is experiencing a second wave of the virus not only in Wuhan, which just recently updated its case counts, but throughout the country. This has extended over the past few weeks to other jurisdictions such as Hong Kong, which just extended its lock down by 14 days, and other parts of Asia that were not initially hot spots but have extended as conditions have changed.

Japan’s integrated resort selection process has come into the crosshairs between numerous issues including the virus, the now-2021 Olympics, the upcoming World Expo in 2025, and the microcosm of Japan’s political process. While tourism has been halted across the globe, Japan will once again be on a path to achieve the tourism goals set by Prime Minister Abe; goals which are achievable with the introduction of integrated resorts once the pandemic subsides. The robust opportunity remains available for Japan to reach these goals and bring in tens of billions of dollars in investment between the three licenses, as well as job creation and other economic benefits that go along with them.

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Rising Sun: Japan begins to enter the homestretch in 2020

Like the cherry blossoms in the spring in Japan, integrated resort developments will begin to emerge into full bloom starting in January 2020. The coming year will see significant progress at the central government level that will then launch the RFP process at the prefecture level.

If the level of activity in the second half of 2019 is any indication, 2020 will prove to be a very robust year. However, there is still a lot of work to do before Japan awards up to three of the coveted IR licenses established through the IR Promotion and IR Implementation Acts.

Since the market began to emerge some 20 years ago, Japan appears to be in the homestretch for the initial round of development of integrated resorts. The movements not only by operators but also by interested prefectures will continue to evolve in the coming weeks and months.

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Research Brief: Japan IR Timeline Update

Late last month, many stakeholders following the Japan Integrated Resort process believed they were thrown a curve ball, following reports stating that the process would be delayed by a year without the appointment of the Casino Management Commission and other cabinet and ministerial positions. However, the delay will likely not be as long as initially thought but would only be a minor delay in the marathon for integrated resorts in Japan.

First and foremost, this process is still in its infancy. While stalwarts of the process have been trying to get legislation passed for over twenty years, the race continues to move at a moderate pace as the government begins its official process to form the Commission and the 300-plus items that still need to be officially decided. It was thought that the Commission would likely be appointed before the end of the current regular session of the Diet. However, this part of the process has been delayed because of the upcoming elections that have been planned for the Upper House of the Diet. While it has not been confirmed that a double election would occur in July 2019, there is also the potential that a snap election in the Lower House could be held at the same time.

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10 Trends – Rating the Rising Sun

Japan may look like it will be a sleeping giant in 2019, but the upcoming year may prove to be the most critical year in Japan’s march toward integrated resort development. Japan took a major step forward this year with the passage of the IR Implementation Bill and the Basic Bill on Gambling Addictions Countermeasures.

Next year will be one of the more critical years in the process as Japan contemplates the largest land-based gaming opportunity since Singapore in the mid-2000s. While outside observers may not see significant progress, a regulatory framework will be established in 2019 that will likely include more than 300 regulations. These regulations will determine the true market potential and scope of Japan’s three integrated resorts.

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Responsible Gaming in Japan – Bill to be key to Japan’s Gaming Market

As Japan continues to look at the development of integrated resorts (IR), many people engaged and following the market are focused on the IR Implementation Bill. While it is important to know the regulatory framework, it is just as important for operators and interested parties to understand the importance of responsible gaming measures. This second bill that has sometimes been overlooked in recent months focuses on this topic.

Japan has the fortunate position of being able to use the Republic of Singapore, which launched its quest for IRs roughly 15 years ago, as a guide. Not only do they have Singapore’s Casino Regulatory Authority as a model for the regulatory body, they also have the National Council on Problem Gambling (NCPG) as a reference point as they develop an atmosphere of responsible gaming.

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Home Stretch in Japan

For nearly 20 years, Japan has gone through several false starts and iterations in its attempt to legalize integrated resorts. In December 2016, Japan took its first official first step toward legalization with the passing of the IR Promotion Bill. Later this spring, Japan is poised to take the final step in this process with the introduction of two bills that will help solidify the initial act: the IR Implementation Bill and the Basics Bill on Gambling Addiction Countermeasures.

The government of Japan has been contemplating what items to include within these bills in its quest to create an environment that maximizes the potential benefit realized by the country in terms of investment and tourism as well as to attract quality operators to the market.

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Research Brief: Japan Post-Election IR Bill Update

The Japanese snap election for the lower house has concluded. The Liberal Democrat Party (LDP) and Japanese Prime Minister Shinzo Abe came out on top after a very calculated risk. The LDP
has a majority win in the House of Representatives and, in partnership with the Komeito, now have a two-thirds super majority. This will allow the ruling parties to push their agenda forward,
focusing on several key items including the reallocation of taxes, childcare, preschool education, and the initiation of constitutional revisions. This is in addition to dealing with the labor crunch and the low birthrate that affect Japan’s economy.

In addition and most importantly to the gaming and hospitality industry, it allows for the continued development of Integrated Resorts through the expected passage of the IR Implementation Bill after the passage of the Responsible Gaming Bill in the coming months to a year. IRs will infuse capital projects into the country while serving as a driver to help meet Japan’s
goal of tourism growth.

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White Paper: Japan Integrated Resorts Executive Summary

The next emerging integrated resort market is on the horizon in Japan. After years of debate, Japan is in the process of developing legislation to create the regulatory and market structure for integrated resorts (“IR”). While the debate still has several issues to work through, Japan has the potential to be one of the largest gaming markets in the world with a revenue potential of $24.2 billion, assuming fully developed IRs are introduced in six regions. Global Market Advisors (“GMA”) completed a detailed analysis that examined the current gaming market, the prospective legislation, components of the RFP process, potential sites, definition of an integrated resort, and the full market potential.

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