ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Business trends

Casino giants itching to place bets on Japan

MGM, Melco Resorts and Caesars tout their plans as legalization grinds ahead

An MGM casino in Las Vegas. MGM has touted its success bringing Japanese culture to the American gambling haven in seeking to build a resort in Japan.   © Reuters

TOKYO -- The world's biggest casino operators are angling to enter Japan as its government moves to allow gambling resorts, but strict restrictions prompted by concerns about addiction will mean they are competing for a piece of a limited pie.

On the same day that Prime Minister Shinzo Abe's cabinet approved a bill that would take the next step to opening so-called integrated resorts, executives from casino operators including global leader Las Vegas Sands gathered for a promotional event on Friday in Osaka, one of the cities vying for one of only three proposed resort locations.

Casino developers' pivot toward Japan, a long-sought-after market, comes as established gambling meccas' fortunes wane. Macau -- Asia's biggest -- saw gambling receipts rise for the first time in four years in 2017. Even so, the take of $33 billion was only about 70% of 2013 levels.

Chinese President Xi Jinping's campaign against corruption and extravagance has cooled travel from the mainland to Macau. The American casino market also appears to be hitting a ceiling, with MGM Resorts International's 2017 operating profit plunging nearly 20% on the year. The global casino market is estimated to be worth around $170 billion per year.

Japan, which has other forms of gambling, legalized casinos only in late 2016 and has yet to pass enabling legislation. Casino operators are already making pitches to interested localities, which also include Tokyo and the northern island of Hokkaido.

MGM has touted its success in bringing Japanese kabuki theater to Las Vegas in cooperation with theater company Shochiku and electronics maker Panasonic. The American company's CEO, James Murren, has visited Japan to promote a concept for a Japanese-style casino resort.

Caesars Entertainment, another major U.S. player, in February proposed four candidate sites for Japanese resorts including Tokyo's Odaiba waterfront district, saying it could develop a facility that would blend nature and culture in harmony.

Mindful of addiction concerns, Hong Kong's Melco Resorts & Entertainment -- which has said it could invest more than $10 billion in a Japanese casino complex -- sought to show officials that it could run a wholesome operation. At the Osaka event, it demonstrated technology for recording gamblers' biometric information, such as with fingerprinting and facial recognition, saying it could share the data with the government if need be.

Japan's plan for integrated resorts seems likely to impose much stricter limits than those of other countries. Japanese customers would be limited to three visits per week and 10 per month, and would have to pay a 6,000 yen ($54) entrance fee. Casino operators would pay 30% of their profits to the central and local governments, and gambling spaces would be able to occupy no more than 3% of the facility's total area.

The levy would be acceptable, said Steven Tight, Caesars' president for international development. Regarding the area limits, Tight said that casinos typically take up only 5% of resorts even in the U.S., where such regulations do not exist, so 3% would not be a problem. The prevailing reaction to the government's plan from industry representatives was relief that something had finally been settled.

If the casino bill does pass, municipalities and other authorities can start choosing potential operators. But the path to passage remains long. The bill is expected to require weeks of debate in committees in both houses of parliament, and with other high-priority legislation on the table -- such as ratifying the revised Trans-Pacific Partnership -- there is little hope of getting it through before the current parliamentary session ends on June 20.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more