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.