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Casino gambling faces long odds in Japan

TOKYO -- A push to allow casino gambling in Japan is gaining momentum, but the deck seems to be stacked against supporters of the move.

     A nonpartisan group of Japanese lawmakers backing the development of integrated resorts, which feature casinos, submitted legislation to last year's extraordinary Diet session spelling out the principles behind the resorts. The legislation will be taken up during the current Diet session.

     The Japanese Communist Party and Social Democratic Party are expected to oppose it, but the legislation could pass on broad support from political heavyweights. Prime Minster Shinzo Abe is the top adviser to the pro-casino group, which numbered more than 200 members from both Diet chambers as of December. Members include Finance Minister Taro Aso, political stalwart Ichiro Ozawa and former Tokyo Gov. Shintaro Ishihara, now co-leader of the Japan Restoration Party.

Legislative changes required

The group would consider crafting a special law for casinos that would allow them to work around restrictions on gambling. Criminal law prohibits gambling involving monetary exchanges, but the integrated resorts could obtain special status akin to horse racing and other forms of publicly sanctioned betting.

     Private-sector operators will likely be entrusted with running the casinos. But many details would need to be fleshed out, including the scope of central government and municipal involvement, as well as the level of discretion granted to private operators. Casinos worldwide are said to offer a return to player -- or the total amount won by gamblers as a percentage of the total amount bet -- of more than 90%. But Japan's publicly run gambling outfits offer a figure in the 70% range. Should Japan opt to maintain consistency with existing forms of gambling, the casinos may end up lagging behind Asian competitors.

     Also, casinos in other parts of Asia offer unique services, such as gambling loans. Japan would need to revise its moneylending business law in order to offer such services.

Keeping out the bad guys

A major concern is that casinos could become a hotbed for money laundering and other criminal activities. Proposals include stationing special police at casinos or using biometrics and other methods of identification to block entry by known criminals and associates.

     But efforts to purge gambling operations of organized crime are required beyond the casinos themselves. In Asia, casinos typically use brokers to woo high-rollers to their tables. Experts warn that such operations could become vulnerable to organized crime. Japan will have to decide whether to focus on competitiveness or on keeping out the criminal element.

     The lawmakers' group seeks to have casinos open in time for the 2020 Summer Olympics in Tokyo. But even if the integrated resorts legislation wins passage in the current Diet session, the government would have to quickly push through related bills and select sites and operators for the casinos. Complex vested interests are expected to emerge in the process, posing a major challenge for political leaders.

Localities see chance to cash in

For their part, municipalities are eager to host such resorts, mainly as a way to increase tourists and jobs. They "would serve as a major catalyst for Osaka's economy," said Osaka Prefecture Gov. Ichiro Matsui. The prefecture is teaming up with Osaka city to woo developers to a waterfront area near Kansai International Airport. Meanwhile, Japan's northernmost prefecture of Hokkaido has undertaken its own study and analysis of integrated resorts worldwide, with an eye on the economic impact.

     Tokyo had been seen as a front-runner to host casino operations, an effort that had been spearheaded by the city's former governor, Naoki Inose. But the coming election to find his successor, resulting from Inose's resignation for a loan scandal, has relegated the casino issue to the back burner.



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