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.


More news from this jurisdiction

JapanWednesday, Jun 21, 2017

City Councillor Hirotaka Ito has become the third candidate to throw his hat into the ring for the July 30 election for the Mayor of Yokohama, a major city being eyed by operators as a possible host for a large IR facility.

JapanTuesday, Jun 20, 2017

At Tuesday’s meeting of the Experts’ Committee advising the Japanese government on its IR Implementation Bill, a series of measures were proposed to keep a very tight regulatory lid on casino facilities.

JapanTuesday, Jun 20, 2017

Tomakomai city in Hokkaido, which is mulling the possibility of bidding for an IR license, is gaining support from the local business community.

JapanThursday, Jun 15, 2017

At Tuesday’s meeting of the Experts’ Committee advising the Abe government on its IR Implementation Bill, the issue of strict limitations on the total size of the casino space was a topic of debate.

JapanFriday, Jun 09, 2017

Japanese slot machine manufacturer, Universal Entertainment Corp says it is investigating the possibility of "fraudulent acts" related to a JPY 2 billion loan conducted by its founder and chairman Kazuo Okada in 2015.

JapanTuesday, Jun 06, 2017

Yokohama Mayor Fumiko Hayashi, previously known to support the idea of integrated resorts, has formally announced she will run for reelection against a candidate opposed to casinos, according to local sources.

JapanSunday, Jun 04, 2017

Las Vegas Sands is best positioned to win a gaming license in Japan due to its strong global track record, MorningStar analyst Chelsey Tam wrote in a note.