Analyst highlights gloomy scenarios for Japan IRs

Grant Govertsen, an analyst for Union Gaming, has produced a second report this month highlighting gloomy scenarios for the future of IRs in Japan.

On July 5, Govertsen pointed to the decisive defeat of the ruling party in the Tokyo Metropolitan Assembly elections as a factor that it made it less likely the IR Implementation Bill would be passed this year, and perhaps not next year as well. This would result in the timeline for Japanese IRs slipping years into the future.

A new report released yesterday argues that the tight restrictions Japan will put on casinos may have the effect of driving away international operators. As one provocative headline put it: “What would happen if Japan threw an RFP and nobody came?”

Many of Govertsen’s basic concerns have also been expressed by some international operators, including his observation, “we don’t believe a single member of Japan’s assembled Expert Committee has as much as one day’s experience planning, building, or operating an IR or a casino. This is a problem as there seems to be a growing disconnect between what sounds good on paper vs. how things will actually play out in real life.”

On the other hand, there have not, to date, been public indications that any major international operator is viewing the Japanese government’s expected tight regulation of casinos as cause to retreat from making bids in Japan.

In fact, operators continue to show keen interest, with the latest evidence being Wynn Resorts’ July 14 presentation by Chief Marketing Officer Michael Weaver to the Japanese media in Osaka outlining how his company could “contribute to Japan and Osaka achieving their tourism goals.”

Govertsen also suggested that should the Japan IRs be realized, the regulatory regime would likely change for the worse over time. He ventured that “the [Japanese] government cannot be trusted to maintain a certain rulebook,” pointing to the experience of the pachinko industry.

More news from this jurisdiction

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The city council of Iwanuma, in Japan’s northern Miyagi Prefecture, envisions a bid for an IR as a measure to help the local area recover from the March 2011 tsunami that devastated Japan.

JapanMonday, Jul 17, 2017

The official-two week campaign period ahead of the July 30 mayoral election for Yokohama was launched on Sunday, with two of the three candidates opposing the hosting of an IR in the city.

JapanTuesday, Jul 11, 2017

The high-profile public debate on gambling addiction, which until now has been mainly associated with the forthcoming establishment of IRs, is set to hit Japan’s lucrative pachinko industry.

JapanMonday, Jul 10, 2017

The city council of Tokoname appealed on Friday to Aichi Governor Hideaki Omura, calling for an accelerated feasibility study for siting an IR within their municipality.

JapanThursday, Jul 06, 2017

Las Vegas Sands and MGM Resorts are among the two operators most likely to receive the urban IR concessions in Osaka and Yokohama, notes Morningstar analysts.

JapanThursday, Jul 06, 2017

The Hokkaido prefectural government has reportedly decided that only one IR licensing bid from the local region will be submitted to the national government.

JapanWednesday, Jul 05, 2017

The outcome of Tokyo’s local elections on Sunday is likely negative for IRs, but could be a relief for Japan’s pachinko industry.