In the wake of the devastating March 11 catastrophe, Japan's economy is confronted with the prospect of not just an economic recession, but long-term contraction that threatens to undo decades of growth. Estimates of the funding required for Tohoku's economic recovery are in the range of 10 to 20 trillion yen, and as the country has already accumulated up a huge fiscal deficit, a tax increase appears unavoidable.
But higher taxes, warns Weekly Playboy (May 2) are almost certain to have the effect of reduced consumer spending, cutting into business profits and resulting in lower tax revenues.
As another option, the magazine proposes legalizing gambling casinos, an idea long debated in Japan but for various reasons never adopted.
"Setting up casinos in Tohoku would contribute to employment and tax revenues," asserts Takashi Kiso, head of the Tokyo-based International Casino Institute Ltd, a consultancy established in January of this year. "Taxes from their proceeds would go to recovery, and no outlays of public funds would be required to build or operate them. They would definitely pave the way to recovery."
As a successful example of the introduction of gambling to raise revenues after a major disaster, Kiso points to the U.S. state of Mississippi, which suffered extensive damage in the wake of Hurricane Katrina.
"Some 2 million people were affected by Hurricane Katrina in 2005," says Kiso. "Mississippi's legislature legalized gambling, on which it imposed an 8% state tax and 3.2% local tax. These proved to be a valuable source of revenues that went toward reconstruction."
Prior to that, Mississippi had only permitted small-scale riverboat gambling. After Katrina, the law was revised to permit casinos on land. Over the past five years, notes Kiso, they have generated tax revenues equivalent to 152.8 billion yen and moreover, casino-related investments have pumped 2.6 trillion yen into the state and created jobs for 25,739 people, whose earnings totaled 64.8 billion yen.
According to a source at a Japanese think tank, the Tokyo metropolitan government was the first to propose the opening of a casino, in 1999, which was envisaged as part of a hotel and entertainment complex to be located at Odaiba.
The plan called for construction outlays of 200 billion yen, and projections estimated the complex would generate an economic boost of over 500 billion yen.
Tokyo Gov Shintaro Ishihara worked as chief pitchman for the project. In 2001, Asian gambling magnate Stanley Ho was said to made a secret visit to Tokyo to discuss the possibility of investment in the scheme.
Since then, about 30 local governments in Japan have campaigned for their own legalized gambling facilities, including Osaka, Kanagawa Prefecture and a consortium of seven local governments in Nagasaki.
Last Dec 9, 40 legislators in Miyagi's prefecture assembly (which has 61 seats) formed a nonpartisan group to promote the creation of a gambling and entertainment complex.
So what's holding them back? The national Diet. It seems that article 185 of Japan's Criminal Code prohibits gambling, and the Diet would have to draw up and pass a new law to nullify it.
But there have been few moves in this direction, and Japan remains the sole member of the 30-nation Organization for Economic Cooperation and Development without legalized casino gambling.
The secretary to a LDP Diet member tells Weekly Playboy that broad-based support exists for legalization of gambling by both the members of the party in power and the opposition.
"The way things stand right now, the basic plan calls for permitting a maximum of 10 such facilities, with two in operation at the startup," the secretary says, adding that the leading contenders appear to be Okinawa and Osaka. "The problem is gridlock in the Diet. Prime ministers has been turning over at the rate of once a year, and there's the usual interparty bickering. The local governments that support the casinos are bitterly criticizing the Diet as being all talk and no action."
But with the government now in increasingly desperate fiscal straits, casino approval may just be a matter of time.© Japan Today