Japan: Market opening is delayed after all
The liberalization of the Japanese gambling industry is progressing, but now a bit slower than expected. Actually, the government around Prime Minister Shinzo Abe had declared that, despite some discrepancies and adversities, they wanted to continue with the plans to build the new casino resorts. But that doesn't seem to be working properly. As the mayor of Osaka announced, the licensing phase will be postponed by six months due to the corona pandemic. The actual opening in 2025 will therefore be difficult to adhere to, Japanese media are therefore reporting a delayed opening in 2027.
Covid-19-Pandemie macht Plänen Strich durch die Rechnung
Japan is sticking with its plans to liberalize the gambling industry. So far, the Japanese have been dependent solely on the country's arcades, where the popular game pachinko is played. So far, there are no “real” casinos in the country. However, that is about to change.In 2018, the government declared that in a first phase, three international gambling groups would be granted a license. This can then be used to open casino resorts in the country. Originally, the plans had assumed that the first resort in Osaka would be able to open by 2025 at the latest.These plans must now be overturned. And this despite the fact that it was announced just a few weeks ago that, despite all the adversities, it would be possible to keep to the schedule.
Ichiro Matsui, the mayor of Osaka, had to backtrack a few days ago. As the politician announced,the tendering phase would be delayed by around six months due to the corona pandemic. Osaka is following suit, because the Wakayama and Nagasaki regions had previously announced changes to their plans. Applications were originally supposed to be submitted here by autumn 2020. The regions are now giving the companies an extended deadline until January 2021. Also because investors are currently unable to enter Japan.
Timetable for investors apparently bearable
All in all, all the timetables for the new casino resorts will be significantly postponed as a result. The first casino resort is set to open in Osaka. Originally in 2025. Now, however, the Japanese media are reporting thatan opening is not expected until 2027. Although this is of course by no means good news for investors, the companies concerned seem to be taking it sportively. According to Japanese media, aspokesman for MGM Resorts Japan confirmed in an e-mail that despite the delays, the application for the Osaka location will be maintained. The spokesperson is quoted by GGRAsia magazine as saying:
“We remain committed to Osaka and will continue to work closely with the city to develop a world-class integrated resort that the people of Japan can look forward to can be proud of.”
Recently several withdrawals from the licensing process
It is by no means a matter of course that the companies are sticking to their application plans. Even before the delays became knownseveral large corporations withdrew their applications for licenses in Japan. For example Caesars Entertainment or the Wynn Resorts. The gaming giants originally tried to get a license for Japan, but have since put those plans on hold. Exactly the same has recentlyalso applied to the Las Vegas Sands Corporation. After the group initially seemed to be enormously motivated, the expansion plans in Japan have now been abandoned. A huge setback for the Japanese government. Las Vegas Sands is a real gambling giant that is already active in Macau, for example. The group had promised the Japanese government investments of up to ten billion US dollars. They will definitely not flow now.
But why not? US media reports that the decisionbecause of the licensing conditions. These are clearly too strict, also in comparison with the requirements in Macau.
Hard license conditions spoil the desire of companies
The US company would have been granted its licenseapparently only for a period of ten years. Das ist schon ein enorm kurzer Zeitraum, der im direkten Vergleich mit Zeiträumen von 20, 25 oder 30 Jahren in Macau steht. Darüber hinaus müssten die Resorts in Japan aber erst noch errichtet werden, wobei für die Baumaßnahmen schnell mit fünf Jahren Bauzeit gerechnet wird. Unterm Strich würden dem US-Konzern damit only five years to recover the investments of around ten billion US dollars. Apparently too sporty a plan that has now driven Las Vegas Sands to retreat. However, the deep connection to the country of Japan is still there, the group announced.
Sheldon Adelson, the CEO of the gaming conglomerate, stated in the press release accompanying the decision:
“While my positive feelings for Japan remain undiminished, and I believe that the country will benefit from business and leisure tourism would benefit from an integrated resort, the framework conditions for the development of an integrated resort have made our goals there unattainable."
In addition to the competitors, who can now look forward to the exit of three corporations, the retreat have also inspired many residents, at least for a short time. These are not necessarily considered big supporters of casino resorts.Public surveys show that support for the new buildings has steadily declined in recent weeks. Experts fear that gambling addiction could spread further in Japan. However, the government plans to impose strict restrictions on residents. So the Japanese players should only be able to do a limited number of casino visits per month or year. First and foremost, it is the tourists who are supposed to bring the money into the coffers of the new casino resorts. It will obviously be many years before Osaka and Co. have what it takes to become the new Las Vegas or Macau.