Analysts believe that major casino operators could reduce or even back off from investment plans for the construction of integrated resorts in Japan, after an advisory panel recommended on Monday too strict regulations for the operation of the country’s nascent casino industry.
Reuters reported earlier today, citing local sources, that a group of politicians, vested with the creation of a regulatory framework for the operation of the future casino complexes, held its final meeting on Monday. The panel proposed the implementation of an entry fee for Japanese nationals as well as other measures that would limit their access to casinos.
In addition, a previously reported possibility for a limit on the maximum casino floor space was also confirmed as one of the proposals to be included in a set of recommendations that is expected to be submitted to Japanese President Shinzo Abe in the days to come.
If the casino floor proposal is approved, that would mean that casinos would only occupy 15,000 square meters of space, which according to industry analysts and executives is too little to justify larger investment in a project of this type.
Casino gambling became legal in Japan in December 2016. However, the onus is now on the Diet (Japan’s government) to craft a new bill that would regulate the country’s casino industry. Politicians have announced a late 2017 deadline to implement that plan.
It is believed that the government will initially allow the construction of two integrated resorts with one casino facility each. According to experts, the two properties will have the potential to generate $10 billion in revenue, thus placing Japan among the world’s top casino destinations.
A number of major casino operators, with Hard Rock International, Caesars Entertainment, and Las Vegas Sands being only a handful of them, have already began looking for suitable local partners and have stated interest in participating in the future bidding process.
Las Vegas Sands, a company that currently operates integrated resorts in Las Vegas, Macau, and Singapore, has even said that it would spend up to $10 billion on a property of this kind in Japan. Other companies have also committed to massive investment.
However, the pending limitations may see some of the companies scrap or change their Japanese plans. Reuters cited an unnamed casino executive who said that the restrictions were serious enough to make their company reduce their maximum investment.
This, in turn, could put the objective for the casino market’s size at a serious risk. What is more, the country’s casino industry was expected to boost Japan’s tourism and economy. However, this cannot not happen or at least not in the originally forecast scale, if too strict regulations are implemented.
The proposed limitations came as part of the government’s strategy to prevent locals from excessive gambling, once the new casinos open doors. Japanese nationals will be required to present their My Number ID cards and to pay an entry fee upon entering a casino, among other things.
