TOKYO -- U.S.-based casino companies are eager to grab a foothold in Japan, one of the world's largest gambling nations, after parliament early Thursday passed a law ordering the government to prepare for the nation's first casino resorts.
The law gives Prime Minister Shinzo Abe's government a year to develop specific plans on issues such as licensing operators and preventing gambling addicts from using casinos. The law doesn't by itself legalize casinos, but proponents say they hope to pass further legislation in coming years that would enable the first casino to open in the early 2020s.
For more than a decade, global casino companies including MGM Resorts International(MGM), Caesars Entertainment Corp.(CZR), Las Vegas Sands Corp.(LVS) and Wynn Resorts Ltd.(WYNN) have been working hard to make the case in Tokyo that resorts featuring casinos could boost the economy. They have hosted seminars, hired lobbyists and teamed up with Japan's major advertising agencies.
"We have been very active in Japan, meeting with key leaders in business and the government to understand the local needs and desires for integrated resorts," said Michael Weaver, senior vice president of marketing at Wynn.
A Caesar's representative said Japan was one of the company's top international priorities. "Las Vegas Sands(LVS) is prepared to make an unmatched investment in Japan," Sheldon G. Adelson, chairman of Las Vegas Sands Corp.(LVS) said. MGM Resorts(MGM) also said it hopes to "create a coalition of Japanese business partners" in bringing casino resorts to the nation.
Until Mr. Abe, Japanese leaders held back because the casino plan is unpopular. Polls have steadily shown that around three in five Japanese oppose the idea, fearing the gambling facilities would introduce crime and foster gambling addiction.
"This won't generate any added value whatsoever. Where is the growth strategy in this?" said opposition leader Renho, who goes by one name, in parliamentary debate last week. She said casinos would damage the "dignity of the nation."
Prime Minister Abe says casino resorts would boost economic growth through tourism, shopping and entertainment.
"Casinos would be a good tool to keep Japan's tourism growing even after the Tokyo Olympic Games in 2020," said Takayuki Miyajima, a senior economist at Mizuho Research Institute.
Defenders of casinos also observe that Japan already has plenty of gambling. In addition to publicly run lotteries and betting facilities for horse, motorboat and bicycle races, millions of people play pachinko, a Japanese version of pinball, at privately run parlors.
The pachinko industry earned more than $200 billion in revenue last year, according to the Japan Productivity Center. U.S. casino gaming revenue for the same period was $40 billion, according to the University of Nevada, Las Vegas, while Macau had $29 billion, said the Gaming Inspection and Coordination Bureau of Macao.
U.S. companies figure they'll hit the jackpot if they can move a fraction of Japan's gamblers to casinos while luring visitors from elsewhere in Asia.
Still, not every casino operator will likely get a license in Japan. Mr. Abe hopes to model Japan's system after Singapore, where a few casinos anchor resort areas.
Lawmakers advocating the casino resort plan say they expect U.S. companies would team up with local players such as entertainment companies, contractors and real-estate firms.
"We hope foreign companies work hand-in-hand with Japanese companies in bringing casinos," said Takashi Toyama, an executive at Panasonic Corp., which supplies surveillance systems to many of the world's major casinos.
Still uncertain is where the casinos will be located. While many regional leaders have expressed interest, Tokyo is seen as the most attractive prospect because of its convenience and big population.
"Tokyo is the only real crown-jewel opportunity in Japan," said a lobbyist for one U.S. casino company. "We all want it."
