Veteran LDP lawmaker Shigeru Ishiba beat the odds despite his long-standing unpopularity among party members and pulled a rabbit out of the hat.

There was no luck of the four-leaf clover for him in 2021, but his fifth attempt finally sealed the deal in last week’s LDP presidential election, making him the 102nd Prime Minister of Japan.

Ishiba thwarted Sanae Takaichi’s bid to become the first female premier, overturning her wide lead in the first round of voting during the final runoff, which pits the top two challengers against each other among the nine contenders.

Ishiba prevailed when third-placed Shinjiro Koizumi, after being eliminated, threw his support behind him, swinging the substantial Koizumi votes in his favor to win the presidency. Koizumi is likely to secure a seat at the leadership table as a reward for his pivotal support.

Political barometer

As politics dictate the long and winding path of casino legalization in Japan, the new leadership presents yet another crossroads in the integrated resort saga, where two licenses remain to be awarded. The double-edged nature of the casino agenda has posed a Faustian bargain for political leaders, with the legislation passing amid high public disapproval. This contentious issue has claimed many advocates in public office, including the mayor of Yokohama, and indirectly, a former prime minister and the governor of Wakayama.

The first integrated resort in Osaka was approved during the tenure of outgoing Prime Minister Fumio Kishida, largely due to political necessity to maintain good relations with the Japan Innovation Party, though he otherwise kept it mostly at arm’s length during his time in office. An application by Nagasaki Prefecture was rejected, and the licensing process was put on hold.

On the surface, the changing of the guard in Nagatacho appears to maintain the status quo regarding casino inertia, as Ishiba hasn’t been part of the political cohort championing integrated resorts. At best, he’s ambivalent, and at times, he has echoed concerns about their social impact, aligning with broad public sentiment.

As it stands, nearly all casino investors have moved on to seek new market opportunities, with the sole exception of Seminole Hard Rock, which still maintains a physical presence in Japan. The company likely would have preferred to hedge its bet on Takaichi winning, as she is the most likely among the leading candidates to continue the legacy of the late Shinzo Abe, which included integrated resorts as a key pillar.

Groundswell of support

Seminole Hard Rock‘s relentless persistence is fueled by strong grassroots support from both the local business community and Hokkaido LDP lawmakers. In December 2023, the latter group initiated IR study sessions aimed at reigniting efforts to bring a resort to the region.

Just three months ago, the Tomakomai Integrated Resort Promotion Council, composed of local businesses and city officials, hosted an IR seminar featuring Makoto Nakagawa, the former top bureaucrat from the Cabinet Secretariat responsible for overseeing the implementation of the IR legislation. All these underscore the coordinated ground efforts to push the project forward.

They were all biding their time for a favorable shift in the political landscape, and while Takaichi had been seen as their best hope, the more optimistic among them might find a flicker of potential in Ishiba.

Regional revitalization

Throughout his 38-year political career, Ishiba has held numerous party leadership roles and ministerial posts, but it was his tenure a decade ago as the Minister of Regional Revitalization that truly defined one of his core ideologies: a dedication to wealth redistribution and the revitalization of rural areas.

It was in this role that Ishiba offered rare vocal support for integrated resorts as a tool for regional economic development and job creation, even making an official trip to visit the integrated resorts in Singapore.

Indeed, rural economic regeneration was one of the primary motivations behind the push to legalize casinos in Japan. However, that justification was set aside as lawmakers close to Abe began favoring metropolitan integrated resorts instead. Another steadfast supporter of regional integrated resorts, senior LDP leader Hiroyuki Hosoda, passed away last year.

Glimmer of hope

The Hokkaido IR bloc needs to win over not only the prime minister but also the prefecture’s governor, Naomichi Suzuki. Politically, the stars had not seemed so aligned here, as Suzuki is a protégé of former Prime Minister Yoshihide Suga, who opposed Ishiba in the LDP presidential race. However, in a show of solidarity, Ishiba has reached across internal party divides to offer an olive branch in the form of a party vice president position to Suga.

This is partly a quid pro quo for Suga endorsing him over Takaichi after Koizumi was ousted in the contest, and partly for political preservation, as Ishiba needs to reach across different camps within the LDP to consolidate power during his tenure and avoid becoming yet another short-lived Japanese premier.

Hokkaido and IR hopefuls will also take heart in the return of former Defense Minister Takeshi Iwaya from the political wilderness. Closely affiliated with Ishiba, Iwaya served as the campaign manager for his victorious election. For years, the affable Iwaya was the flag-bearer and face of Japan’s IR initiative as chairman of the bipartisan IR Caucus, and he is set to be rewarded with the Foreign Minister post in Ishiba’s Cabinet.

While all the pieces haven’t quite fallen into place yet, the presence of more pro-IR individuals in the new leadership lineup is an improvement over the situation under the previous Kishida administration. It’s not quite enough to trigger a rush of casino investors returning, but perhaps enough justification for Seminole Hard Rock to hold on for a while longer.

Elections, and more elections

Don’t expect anything to happen in the next six months, though, as the new prime minister will likely avoid any controversial agenda during his honeymoon period in office, especially with plans to dissolve the Diet and call an early election on October 27. This may present a significant challenge for the longstanding LDP government, which is grappling with its lowest public approval ratings and losses in recent House of Representatives by-elections and local elections.

Ishiba faces a critical showdown with veteran opposition statesman and former Prime Minister Yoshihiko Noda, who has returned to the political spotlight after winning the leadership contest for the main opposition Constitutional Democratic Party. Political analysts are not ruling out a shocking defeat for the LDP, a result that the sole Japan IR operator may quietly welcome, as it would grant the Osaka MGM Resort a prolonged monopoly in the Japanese market.