Analysts warn that too strict regulations may produce the exact opposite of what the gambling industry expects from Japan’s recently legalized casino market.
Japanese lawmakers are in the middle of a process of crafting a second casino bill that would regulate the country’s industry. The legislative piece is expected to be introduced during an extraordinary Diet session this fall.
According to Union Gaming Securities Asia Ltd. analyst Grant Govertsen, the bill is becoming more and more restrictive with each passing day and this may damage the Japanese casino industry even before its actual opening.
Mr. Govertsen wrote in a note on the matter that the restrictions planned to be implemented could scare investors away instead of luring them into spending billions of dollars on the construction of luxury integrated resorts.
Some of the world’s biggest casino operators have announced interest in participating in Japan’s future casino bidding process. However, if the currently developed legal framework features more restrictions than necessary, they may back off.
Lawmakers have previously pointed out that they would use Singapore’s casino industry as a base to draw Japan’s own laws. However, Mr. Govertsen said he believes this approach may be a bit flawed.
For instance, there have been reports that Japanese officials may limit the size of casino floors to around 161,500 square feet, as is the case in Singapore. According to the Union Gaming analyst, limiting the gaming space available would only hamper the desired growth of the casino industry and the success of the integrated resorts model.
Mr. Govertsen pointed out that Tokyo and Osaka, two of the cities that would contend for hosts of the two integrated resorts to be built in Japan, are much larger than Singapore in terms of population. The analyst further explained that if the government wants to increase inbound tourism, it should consider regulations that would not put such a serious space constraint.
As it has become known from local media reports from the past several months, the new integrated resorts bill will include information about how the industry will be regulated, where the properties will be located, and how they will be operated. Problem gambling and the protection of the population from gambling-related health and social issues will also occupy a significant part of lawmakers’ time.
According to initial plans, Japan will open its casino market with two integrated resorts located in metropolitan areas. The resorts will feature casinos, hotel, conference, and entertainment facilities. It is believed that if regulated properly and if interest in the country’s casino industry is just as great as expected, the local market could be worth between $10-$20 billion.
