Japan legislature approves casino bill despite opposition

The casino bill passed by the Japanese parliament will authorize the establishment of casinos in up to three locations as part of "integrated resorts," comprising hotels, conference rooms and shopping facilities, Kyodo News reports.

The vote was held on the de facto final day of the six- month-long Diet session, after a panel of the ruling coalition-controlled chamber approved the bill on Thursday.

The more powerful House of Representatives already endorsed the bill about a month ago. The Diet session, which was extended for a month by the government in a bid to secure passage of the casino legislation and other controversial bills, will formally end on Sunday.

Global casino operators have said they would spend as much as $10 billion on each location under the legislation, a pillar of Prime Minister Shinzo Abe’s plan to boost tourism and stimulate growth.

Casino-centered resorts "will help stimulate regional economies and eventually lead to growth of the overall Japanese economy," Mr. Abe said on June 1. The prime minister aims to increase the number of foreign tourists to 60 million by 2030, up from about 29 million in 2017.

Legislation offers companies such as Las Vegas Sands and MGM Resorts their first chance to open in Japan

The first integrated resort will likely open in the mid-2020s after the government spends some time selecting locations, with Nagasaki, Osaka and Wakayama prefectures as well as Hokkaido so far expressing readiness to host casinos.

The resorts would also feature hotels, restaurants, shopping malls and theaters. Daiwa Institute of Research estimated that investment in the three casinos, if the locations included Japan’s two biggest urban areas, could approach $50 billion. Visitors could spend nearly $20 billion each year on entertainment, retail and lodging at the resorts once they open, Daiwa estimated.

"It would be a difficult competition for [smaller] regional cities because many operators seem to be more interested in metropolitan areas where there are also more locals with extra cash to spend at casinos," said Takayuki Miyajima, an economist at Mizuho Research Institute. While the government expects the casino resorts to attract foreign travelers, Osaka estimates about 70% of expected visitors would be Japanese.

Opinion polls show the legislation is deeply unpopular. A July survey by Jiji Press found 62% of respondents opposed allowing casino resorts, compared with 22% in favor of the plan. It didn’t supply a margin of error.

To ease concerns about local gambling addiction, the law requires residents of Japan to pay a ¥6,000 ($53) entrance fee to get into a casino and limits admissions to 10 times within a 28- day period. Foreign visitors will be able to enter free.

Japan already has so-called legal public gambling, including horse racing and boat racing. But the scope of the casino legislation goes beyond that and critics have said discussions in the Diet were insufficient, while a number of issues remain unsolved, including how to prevent a potential rise in crime.

Whether Japan can implement effective countermeasures against gambling addiction was also a major issue. A government survey released last September estimated around 3.2 million Japanese adults were grappling with gambling addiction or had suffered from it in the past.

Still, the government has said Japan's measures are among the best in the world as they will only allow local people to visit casinos up to three times per week and 10 times per month by using government-issued My Number identity cards, embedded with IC chips, to count their visits.

Under the law, people living in Japan will be charged a 6,000 yen ($53) entrance fee for casinos, while foreign visitors will be able to enter free of charge.

A total of 331 detailed points of law will be decided afterward without Diet deliberations, including a scheme allowing casino operators to lend betting funds to players, which legal experts argue could increase the number of addiction cases.

But it is unclear whether Japan will succeed in attracting wealthy foreign individuals as it is likely to face fierce competition from regional rivals, including Macau, Singapore and South Korea.

Some projections have shown Japanese nationals would account for between 70 and 80 percent of casino visitors, contrary to the government's expectations of drawing more foreigners.

In Japan, de facto gambling has long been permitted in slot machine and pachinko parlors as they are categorized as gaming instead of gambling, but the average amount of money to be spent on casino bets is almost certain to be much higher.

Although a law allowing integrated resorts to open took effect in 2016, additional legislative steps on their actual operation were necessary.

In an attempt to ensure the enactment of the legislation, the government and the ruling coalition parties extended the term of the parliamentary session, which was originally scheduled to end on June 20.