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Casino Gambling Is Coming To Japan - But Not Until About 2025

It’s been a long time coming – but there will soon be casino gambling in Japan. Well, soon being the year 2025, give or take.

Last week, Japanese lawmakers approved allowing licensing for three casinos.

Andrew Gellatly is the head of global research services for Gambling Compliance, an information network for the gaming industry. He says most people in Japan are opposed to allowing casinos but three top government officials, including Prime Minister Shinzo Abe, pushed hard for the bill's passage.

Gellatly said Abe promises to tour the country over the next few months to promote what the casinos will do for Japan.

“It has all been hung on this idea of tourism development, enhancing Japan as a place for visitors, particularly Asian visitors, mainland China visitors that are forming the majority of new tourists in Japan," he said.

Gellatly said Japan already has pachinko parlors but many people don't consider the slot-machine-like game to be gambling. Instead, it is categorized as "entertainment." 

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Despite the label, pachinko addiction exists, which might be why some people are opposed to Las Vegas-style casinos.

“They see the problems that pachinko parlors have caused with addicted players and they don’t really know what casinos will bring but they can’t imagine it making things better," he said.

And as for the idea of Chinese customers coming to Japan, Gellatly is not sure that will happen because the Japanese law doesn't allow for junkets. Under Chinese law, large amounts of money cannot be moved from the mainland. So, in Macau, China, junket tour operators handle the banking needs of gamblers. 

Since that is not allowed under the current Japanese law, Gellatly doesn't believe a large number of foreign tourists will visit Japan to gamble.

Despite a few of the drawbacks, the development is potentially lucrative for the big hotel-casino companies MGM Resorts International, Las Vegas Sands, Caesars Entertainment, and Wynn Resorts. 

Howard Stutz is the executive editor for CDC Gaming Reports. He said Nevada casino companies have been working in Japan for many years to try to sway lawmakers to pass the law.

“They see it as an absolutely lucrative market, the next big market,” he said.

Stutz said that analysts have predicted gaming revenue of $10 to $20 billion a year in Japan.

“This is really a huge opportunity for Nevada casino companies,” he said.

But Stutz said the casino is not really what Japanese officials are looking for by allowing the industry in. 

"Gambling is an amenity," Stutz said.

Japan's real focus, he said, is improving its convention and meeting space and creating tourist destinations, which is similar to what Singapore wanted when it allowed three casino licenses. 

Despite lawmakers passing the legislation, there are a lot of unanswered questions, including who will be allowed to apply for the licenses and how the licensees will be selected.

There is also a large question about location.

“In Japan, we don’t know whether we’re talking about casinos in the center of Tokyo, which might be high-rise buildings, or whether we’re talking about large park-like areas in some of the southern areas like Wakayama or Nagasaki. There has been very little guidance from the Japanese government about what it is they actually need,” Gellatly said.

Whatever is finally built, Stutz is not worried about its impact on Las Vegas.

"Las Vegas didn’t really lose with Macau," he said.

Stutz said that high rollers come to Las Vegas and go to Macau. In addition, middle market Asian tourists come to Las Vegas usually as part of a larger trip around the United States.

Plus, Gellatly pointed out that Las Vegas offers more entertainment, restaurants, shopping and diverse gambling than Asian gambling towns like Singapore and Macau -- and likely Japan will be no different.

Guests

Howard Stutz, executive editor, CDC Gaming Reports; Andrew Gellatly, head of global research services, Gambling Compliance

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