The spinning wheel on a roulette table is seen at Japan Casino School in Tokyo. Photo: REUTERS file
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U.S. casino giants bet on Japan, raising addiction fears

37 Comments
By Dave Hueston

Since the enactment of a law in July 2018 allowing legalized casinos to open in Japan, large-scale resort operators from the United States have been boosting their promotional activities to enter the fray of Japan's budding casino market.

With the government's integrated resorts promotion law set to allow up to three coveted gaming licenses for the development of casino resorts around the country, a potential market worth by some predictions 2 trillion yen a year ($18 billion), U.S. casino giants are staking their chips for what they hope will be a big payout.

Although expectations are high in Japan for substantial economic gains, including job creation, the potential involvement of such high-end casino operators as Wynn Resorts Ltd. and MGM Resorts International has added to widespread public concern about a rise in gambling addiction and negative social impacts.

At a press conference held for Japanese media in a suburb of the U.S. city of Boston on July 24, Wynn Resorts Development Japan President Chris Gordon spoke at length of the company's desire to build the "world's largest" integrated resort in a city such as Tokyo, Osaka or Yokohama.

The term integrated resort, or IR, refers to a comprehensive entertainment complex that, alongside casinos, incorporates facilities such as shopping malls, theaters, hotels and theme parks. The locations for the three IRs are expected to be chosen by next year at the earliest.

One of the biggest components of an IR envisioned by Wynn Resorts would be throwing its door open to organizers of so-called MICE -- meetings, incentives, conferences and exhibitions -- events, explained Gordon.

Also facing concerns about deteriorating public safety linked with gambling when it opened its latest resort in the United States, the $2.6 billion Encore Boston Harbor located in Everett, Massachusetts, which opened on June 23, Wynn Resorts footed the bill for the hiring of 20 additional local police officers, Gordon said.

It also spent some $65 million (6.8 billion yen) on road improvements to the 33-acre property, which opened public access to the waterfront for the first time in over a century.

Gordon was also keen to note that the Encore Boston Harbor casino project got the nod from a major academic district just 6.5 kilometers away, which includes Harvard University.

In June, the IR promotion bureau in Osaka Prefecture and the city of Osaka announced that seven casino operators were vying against each other after sending in early request-for-concept documents for a gaming license in Osaka. Under the new legislation, the casino resorts are due to begin operating in the mid-2020s.

Among those making pitches in Osaka were Wynn Resorts, Las Vegas Sands Corp and MGM Resorts International, which has teamed up with Japanese financial group Orix Corp.

Of the non-U.S. companies, Hong-Kong based Melco Resorts and Entertainment Ltd. and Genting Singapore Ltd. are also said to be in the running, while two other companies have not made their bids or concepts public yet.

Las Vegas Sands recently dropped out of the Osaka race, saying it will instead focus on developing a resort in the Tokyo and Yokohama areas. MGM Resorts' chief executive Jim Murren has said his company "remains deeply committed" to developing a resort in Osaka.

Wynn Resorts' Gordon said that if the company gets the green light, it would put all its energies into its Japanese resort -- whether in Osaka or elsewhere.

"The whole company, president, vice president, all the staff, will be focused on how to do that right. I think one of our real differentiators is how we really focus on the quality of every part," Gordon told reporters after the seminar at Encore Boston Harbor.

Although the Japanese government has not announced a basic policy to decide the three locations for building IRs, Osaka has been the most gung-ho, already proposing a plan to open a venue on Yumeshima Island, an artificial island in Osaka Bay, ahead of the 2025 World Expo in the city.

Osaka has estimated 1.96 trillion yen in total economic benefits for the IR's overall development and business operations, effective tax revenues of 250 billion yen and employment opportunities of 97,000 people per year, according to a 2017 prefectural report.

Gordon stressed that Japan's plans to boost tourism ahead of the 2020 Olympics and Paralympics and beyond is what makes it an attractive market for a casino resort. The government has targeted 40 million tourists by next year and a long-term goal of 60 million by 2030, establishing tourism as a key growth sector.

"As you know, the government has set goals for the next 20 years to raise tourism to a very high level. We like that. It's also a society that has had an interest in gaming -- they certainly have gaming now with pachinko, horses and motorboats."

Japan's MICE market, in particular, for group tourism dedicated to planning, booking and facilitating large conferences is "very strong," Gordon said, adding that "Japan is a country with a famous history of quality, famous history of customer service. That's a good fit for our brand."

Although Gordon said "Osaka is the most active" city in pursuit of a resort, he has not ruled out the other big cities, such as Yokohama and Tokyo. The capital, he said, "is being a little bit quiet (now) as they work on the Olympics."

Yokohama recently threw its hat into the race and has said that with the cooperation of 12 casino operators, including Wynn Resorts, it estimates it could generate annual economic effects of up to 1.6 trillion yen. It is considering building a resort at the 47-hectare Yamashita Wharf, adjacent to Yamashita Park, a major tourist site.

But the big U.S. casino operators are not only looking to sink their teeth into the biggest cities in a market with the potential to become Asia's second largest after Macau. They are also considering regional hubs.

Native American tribal casino operator Mohegan Gaming and Entertainment and Florida-based Hard Rock International, which operates 11 hotel casinos worldwide, have both unveiled plans to build a resort in Hokkaido's Tomakomai.

Mohegan's plan, for example, features three deluxe hotel towers including 2,500 luxurious guestrooms of various styles, themes and size. The IR would cost between $3.5 billion and $4.5 billion to develop and employ up to 7,000 people, a public relations official for Mohegan said.

"During the winter, the region offers some of the best skiing on the planet. We believe there is an opportunity to further develop this industry. During the summer, the region is an ideal location to escape the heat in Tokyo, Seoul or Shanghai,'" the official told Kyodo News.

Although Wynn Resorts' Gordon said he could not give out specifics, in terms of the number of business partners the company is talking with in the respective cities or an estimate of its potential investment in Japan, he did say it would be the largest IR the firm has ever been involved with. Wynn Palace in the Cotai Strip area of Macau cost $4.2 billion.

"In Osaka, it would be in between 2 and 3 million square feet (186,000-280,000 sq. meters) for a MICE facility. That's probably eight times the size of (Encore Boston Harbor)." He said he expected the resort would create as many as 16,000 jobs.

"This would be much larger than the investment in Cotai. But the reason we didn't put an exact number on it is it's very early, we still have a lot of design to do, a lot to learn," he said after reportedly making estimates earlier this year of an initial investment in the $8 billion to $9 billion range with operating expenses of between $940 million and $1.4 billion.

Another reason industry insiders give for the push to enter the Japanese market is a saturation of casinos in the U.S. gambling hub of Las Vegas, making expansion there difficult.

As the main customers in Las Vegas have been Chinese, according to dealers, U.S. casino operators have expanded their businesses into Macau and Singapore in recent years to more easily target a wealthy Chinese and South Asian clientele. Now, with Japan set to become more of a world tourist destination, the floodgates have been opened.

The central government will make public a draft of its basic policy, which is expected to incorporate evaluations on economic impacts and gambling addiction, as well as location selection criteria and the deadline for applying for licenses, as early as next month.

Although the prefectures of Wakayama and Nagasaki have also entered the race and Tokyo, Hokkaido and the city of Chiba are considering joining the competition, 40 local governments have said they will not apply, citing concerns over public safety and an increase of people being saddled with gambling debts.

As part of efforts to tackle addiction, residents of Japan will be charged a 6,000 yen entrance fee for casinos and be limited to 10 visits per month and thrice per week.

A 2017 interim government report estimated that 3.6 percent of Japanese adults have been addicted to gambling at some point in their life, higher than the 1 to 2 percent average in other developed countries, and that gamblers have a predilection for easily accessible pachinko parlors.

Nearly two-thirds of respondents to a Kyodo News poll conducted last year opposed opening casino resorts, citing concerns over gambling addiction and a possible increase in crime.

But as the new integrated resorts begin operations from the first half of the 2020s, it still remains to be seen how Japan's national and local governments will successfully establish an effective safety net to ameliorate concerns about problem gambling as well as criminal activities, such as money laundering, linked to casinos.

Brendan Bussmann of Las Vegas gaming and hospitality consultancy Global Market Advisors said Japan will likely need to implement safeguards across all forms of gambling, just as Singapore did through the creation of its National Council of Problem Gambling.

"Japan will likely have to create a similar organization that will need to use evidence-based research to establish the best practices for exclusion, awareness, research and resources across all forms of gaming, including pachinko," Bussmann told Kyodo News.

"Technology can play a significant role through the training of staff, exclusionary programs, analytics, and research," he added.

As for dealing with the underworld of organized crime often linked with gambling, Wynn Resorts' Gordon said, "Without getting into specifics into what we'd do every day, we'd obviously work very closely with local law enforcement. The Japanese government are the experts as to what elements might be active in Japan. As we are in all our facilities, we would be extremely cooperative and aggressive."

© KYODO

©2019 GPlusMedia Inc.

37 Comments
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As part of efforts to tackle addiction, residents of Japan will be charged a 6,000 yen entrance fee for casinos and be limited to 10 visits per month and thrice per week.

Limitations such as that will kill the casinos. The backbone of Casinos are their consistent customers.

Also, casinos won’t add to or cause gambling addiction in Japan. Every morning I am out running, there are people sleeping and lined up outside the pachinko parlors at 5am. I don’t see the government doing anything to curb that addiction.

15 ( +16 / -1 )

Pretty much everything currently illegal should be legal with regulation, however, the amount of regulation being thrown at gambling is essentially taking this business away from the yakuza to hand it over to government and corporate yakuza. What if I wanted to set up a little one-man mah-jong parlor? Nope. Need that coveted gambling license. So we get giant resorts and the same old yakuza and no opportunities for the ordinary people except to be slaves to corporate casinos.

2 ( +3 / -1 )

JJ J, agree with you government don't really know much about the gambling problem, or care. Seen the queue in the morning. The hardcore punters will probably use multiple ID cards to get access to as much as their addiction drive them.

IMHO, this isn't going to end well.

10 ( +10 / -0 )

Just what Japan needs....not...

10 ( +10 / -0 )

If the government really wants to help tackle the inaka depopulation problem, they'd look into having these casino resorts there.

Look at how much the Indian reservations in the US have benefited. It could work out the same way here.

6 ( +6 / -0 )

As part of efforts to tackle addiction, residents of Japan will be charged a 6,000 yen entrance fee for casinos and be limited to 10 visits per month and thrice per week.

This is a joke! It only takes one day of gambling to bankrupt you.

6 ( +6 / -0 )

If your number of visits are limited that means they tag you like cattle. Do I want my name and personal information bouncing around some effing Casino computer system? No I most certainly do NOT!

4 ( +5 / -1 )

Nearly two-thirds of respondents to a Kyodo News poll conducted last year opposed opening casino resorts, citing concerns over gambling addiction and a possible increase in crime.

I'm guessing they are basing these fears on Pachinko. Over 20% of the population regularly play Pachinko, 50% of which have gambling addiction problems. However, nothing is done to help or prevent these problems because, for some strange reason, Pachinko is not considered gambling. It is run using a loophole in gambling laws to avoid prosecution. I'm also going to guess the crime refers to the large amount of takings that are regularly stolen from Pachinko establishments. Casinos are run very scrupulously with high security, which is very much unlike the shady and unscrupulous Pachinko industry.

5 ( +5 / -0 )

Casinos are places to gamble, spend your hard earned money, and enjoy free drinks. Japanese people are more than rich in savings. It is time to spend that money!!

-6 ( +2 / -8 )

I really don't think enforcing an entrance fee to Japanese would help curb their addiction but could even whet it since they'll be more driven to win that money back. Personally, I believe that people with gambling problems should police themselves and allow casinos to ban them upon their own, family or friends' requests. A lot of my family members have a gambling addiction and have self-banned themselves from casinos and it surprisingly works. Just remember that casinos make a lot of money and opening such a business in Japan would help rake in more tourists and cash, not to mention making jobs.

2 ( +4 / -2 )

I think under the rules they are considering, the Casino would become a financial black hole for the people and the economy.

6 ( +6 / -0 )

I am really looking forward to these Integrated Resorts! I cannot understand why people are negative. Its not all about gambling, thats just a small part. There will be top-class restaurants, 6 star hotels, amusement parks, shopping malls, theatres, cinemas and so on. They will be a huge boost for tourism, and help shoot up tourist numbers to over 50 million per year. Win-Win!

-11 ( +3 / -14 )

A man has as many masters as he has vices.

4 ( +4 / -0 )

Every morning I am out running, there are people sleeping and lined up outside the pachinko parlors at 5am. I don’t see the government doing anything to curb that addiction.

Yeah I see that allot of that sadness, those people have no life, but its a well known secret that many are run by Koreans, and Koreans loyal to the North...so Ive been told. Gives them a job I guess

Actually with all those machines, some vendor will get allot of work out of that as they are very service dependant. If they are brought in from the states, could be a good job for foreigners also.

0 ( +1 / -1 )

Japanese seem to be taking a page from the Democrat playbook on revenue creation for broke over taxed cities. Many of these Dem run US cities had race tracks and bingo addiction. Always going for the low hanging fruit; the hard work takes a real leader like Trump.

In Japans case they can just suck out the pensioners money at the casino, tax the hell out of that.

-9 ( +2 / -11 )

@ Smithinjapan. What about the 97,000 jobs that will be created by these Integrated Resorts in Osaka alone. I dont call that a "disaster", I call that a great boost for the economy.

-11 ( +2 / -13 )

nah...its not a good thing unless its foreigners coming in droves...and even that has its downside. a port call to Yokohama? not the most interesting place. What it will do to the geriatric society remains to be seen. most of them dont have much to do, so I guess pay out the pension then take it back at the casino and tax that so your getting some return I guess

-2 ( +2 / -4 )

Japan needs to think about its youth, and attracting an educated immigrant population. Green cities with easy commutes to work, get really creative, could almost be a paradise, instead of a hell it is now. But there is too many obstacles (mostly human) in the way. so they give up and take the easy casino pick.

8 ( +8 / -0 )

All the downsides are overblown.  Casinos in many other countries are a boon, not a blight.

-4 ( +2 / -6 )

Those advocating these casino resorts wouldn't want to live near one.

If they are so great at boosting jobs and the local economy, why doesn't the government insist that these resorts are based in run down rural areas that need the people and money.

6 ( +6 / -0 )

Everything in this article sounds bad.

5 ( +5 / -0 )

These establishments are like those mercenary vulture funds which prey upon distressed companies, except that their target is individuals who lack the self control most of us take for granted. Addiction is also a two way street; its tentacles extending to the public authorities which sign off on it and become hooked on the easy money.

5 ( +5 / -0 )

Funny, the comments about increased addiction were not such a big issue, not a "headline" at least, when the casinos that were looking to invest here were from Asian countries.

Just another way of looking at the "west" as being the root of all gambling addiction!

0 ( +3 / -3 )

As part of efforts to tackle addiction, residents of Japan will be charged a 6,000 yen entrance fee

That can be circumvented in many ways....eg...free / discounted drinks / food/ accomodation for punters, value vouchers/ merchandise, " gifts" " upon entry or after spending certain amount... etc.. ..etc...

@JJ...spot on comment about the pachinko addicts...govt doesnt give a toss , just lip service as usual.

@Ganbare...yeah yeah...whatever LDP proposes is always a wonderful, winning idea ...

9 ( +9 / -0 )

I think that it's fine to have casinos and gambling, as long as a proper (ie - ethical and responsible) level of the money is diverted to rehabilitation and education. Educate the people on what gambling is, why people enjoy it, how to do it responsibly, and how to identify an addiction. Then provide rehabilitation opportunities for those who end up needing it.

This is responsible governing. It allows the people to be free to make mistakes, while providing risk management so as to have the least impact upon society.

-1 ( +1 / -2 )

be limited to 10 visits per month and thrice per week.

"Look sir, it's only Tuesday and you've already been here thrice this week. We cannot accept your money, we are not interested in making a profit today. Please go home and do not spend your money here until next week."

......said no casino EVER!

8 ( +8 / -0 )

Abe a conservative politician?

Don't make me laugh!

1 ( +3 / -2 )

Japan needs something to pick up the slack after the Olympics have ended and everyone has gone home. I guess that casinos will have to be it.

5 ( +5 / -0 )

Once again Abe and his LDP sold out Japan to the Americans, the foreign influence in Japan is getting bigger at an alarming rate.

I really don't understand the need for these mega casino resorts, Japanese people who want to gamble can go to Pachinkos or bet online like the rest of the world.

Is this the type of foreign tourists Japan wants to attract gambling their money away in American owned casinos ?

The local residents will not see a dime of these enterprises and they will have to deal with all the nuisance too.

And what is up with making only Japanese citizens pay an entrance fee of 6000 Yen, surely this is a violation of anti-discrimination laws ?

1 ( +1 / -0 )

Ganbara Japan; What about the 97,000 jobs that will be created by these Integrated Resorts in Osaka alone. I dont call that a "disaster", I call that a great boost for the economy.

Japan already has a major labor shortage. These are all low income jobs. Slave labor for the tourist and the rich. People will be working hard and will barely scape by. So who really benefits from these casinos?

2 ( +2 / -0 )

Wakarimasen; Just because it works in one country doesn’t mean it will work in another.

1 ( +1 / -0 )

Isn't it about time this country grew a spine and stop treating it's citizens as children? Alcohol is available 24/7 but gambling makes the government wet the bed?

0 ( +1 / -1 )

Isn't it about time this country grew a spine and stop treating it's citizens as children? Alcohol is available 24/7 but gambling makes the government wet the bed?

What? This comment makes no sense. The government has been working on legalizing casinos for years now. Are you reading a different article than the rest of us?

1 ( +1 / -0 )

It takes years? Why prey tell does it take years? Calculating how much money should be distributed in brown envelopes? Who gets the biggest "bonus"? It's a business, just like any other.... businesses don't take years...

What? This comment makes no sense. The government has been working on legalizing casinos for years now. Are you reading a different article than the rest of us?

1 ( +1 / -0 )

It takes years? Why prey tell does it take years?

Because introducing a new system that needs financial, criminal, and mental health oversight is something that requires due diligence, which takes years.

You act as if this makes no sense. Expecting that legalizing a system such as gambling to be done in a year (ie - not years) is to be honest, entirely ridiculous. You are phrasing your questions as if they not only make sense, but that the underlying assumption they are built on also makes sense, when it clearly does not in our real world.

1 ( +1 / -0 )

Raise the entrance fee to 10,000 yen or more to the casinos for citizen and PR. Family can issue restraining order to family members (to parents, husband, wife, children) who can't control addiction or no income. Bankrupt person also can't enter the casino. Singapore is doing quite well. Can exchange learning with Singapore how they control their casinos. To avoid any social issues from compulsive / addictive gambling.

0 ( +0 / -0 )

They should not allow foreign companies to open a gaming business in Japan to begin with. It is like inviting the mafia into a country. Sadly it has already begun in Hokkaido.

-1 ( +0 / -1 )

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