Japan likely to adopt Singapore-style legislation, Fitch says

Japan is likely to adopt gaming regulations that are similar to Singapore, with limited license and an entrance fee for locals, Fitch Ratings says in a report.

The structure of the legislation is likely to limit licenses in a major city, but may include multiple smaller satellite licenses, it said, adding Osaka and Tokyo are the likely locations for major IRs.

Two major IRs, with 500 table games and 3,000 slot machines each, would be likely to generate about $6 billion in annual revenue.

While risks and constraints are largely unknown at present, potential restrictions such as limitations or high entry levies on locals or a high gaming tax rate could hinder return on investment, it said.

“ROI will likely be pressured by the anticipated high cost of development in terms of labor, materials and land. Other concerns include Japan’s high corporate tax rate (approximately 30 percent despite recent cuts); the sometimes volatile yen exchange rate; potential for South Korea and Taiwan to liberalize gambling; and lingering tensions with China.”

Meanwhile, support for Prime Minister Shinzo Abe and his cabinet fell in December, in part due to his administration’s handling of the casino legislation, which remains unpopular with the general public.

The support rate tumbled to 54.8 percent from the previous month, according to a two-day nationwide poll, reported by Kyodo News, with over half of the respondents viewing the outcome of last week’s Japan-Russia summit negatively, along with the legalization of casinos.

The Cabinet’s approval rating compared with 60.7 percent in November, while its disapproval rating rose to 34.1 percent, up 3.7 points.

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