On December 25 last year, Tokyo prosecutors arrested Tsukasa Akimoto, a member of the governing LDP party, on suspicion of receiving 3.7 million yen ($34,000) in bribes from Chinese sports betting group 500.com.
Akimoto, who denies any wrongdoing, has been a proponent of introducing casinos -- also called integrated resorts -- to Japan, and his arrest had immediate negative consequences for the industry: the opposition party announced that it would submit a bill in 2020 to ban them.
The potential negative social and economic impacts of casinos are well known, and while the Japanese government has done a good job of laying the groundwork for them, it still has much work to do, as does the private sector, to ensure the industry is productive, not destructive, for Japan.
The government started well. It established the Casino Management Committee to grant licenses, monitor operations and handle security issues, as well as develop prevention and treatment programs for gambling addiction.
Lessons from Korea and Singapore helped to set restrictions for local residents involved in gambling activities, thereby minimizing the threat of addiction.
Residents who might be affected by integrated resorts are also being heard. By having town hall meetings, hearings and referendums, each jurisdiction can provide information to residents, including on potential financial benefits, and obtain their feedback. Hokkaido abandoned its candidacy due to the great concern of its residents.
Integrated resorts will help diminish the illegal gambling which already exists in Japan. Although pachinko, which is akin to pinball mixed with a slot machine, is a form of entertainment, several operations have been associated with money laundering. The government, especially the CMC, must ensure the transparency of integrated resorts' operations, including money transactions and licensing, through a constant process of review and adjustment.
One of the government's biggest tasks is to prevent compulsive gambling, which is both a mental health and a social problem, and try, if it happens, to minimize its effect on personal, family and community well-being.
This requires public awareness and education programs, which show gambling as a form of entertainment, rather than a way to change the economic or social status of individuals. These should also teach both adults and children that gambling inspires irrational beliefs in skill and control.
When, as is inevitable, gambling does become a problem for some, the country needs counseling and treatment centers. The CMC should form an advisory board to discuss innovative ways of developing and operating counseling and treatment programs through academic conferences and workshops.
But private industry needs to step up too. Specifically, it must address concerns about large casino companies from foreign countries coming to Japan and failing to understand local situations and sensitivities.
Learning from the early stages of the Disneyland Paris case, integrated resort companies must first comprehend the local markets' needs and customs and then appropriately apply the global concept. Not every success in Las Vegas or Singapore can guarantee a favorable reaction in Japan.
As the focus of integrated resorts moves away from gambling, developers need to make other aspects attractive: conventions, hotel stays, food and drink, entertainment, based in local attractions as much as possible.
There are plenty of these non-gambling attractions in areas which might host integrated resorts. Expo 2025 will draw convention-goers and gourmet tourists to Osaka. Those attending exhibitions or shows at an integrated resort in Yokohama can take advantage of luxury tourism in nearby Tokyo. Okinawa can attract leisure travelers with golf and beach resorts.
Finally, integrated resort companies should develop a specific plan for corporate social responsibility. Integrated resorts give rise to great concerns about negative social impacts, like problem gambling, and environmental impacts, like traffic congestion and air and water pollution.
To deal with problem gambling, integrated resort companies should develop responsible gambling promotions to educate their customers. In addition, they must provide education programs to employees who are likely to become addicted gamblers. Integrated resorts can learn from successful CSR stories involving self-exclusion programs, employee helplines and foodbanks.
In Korea, Kangwon Land developed a plan to hire local residents, use local resources in its supply chains and distribute its profits in education and community infrastructure. Las Vegas Sands has implemented a recycled water system to use dirty groundwater for landscaping after thorough filtering.
The opportunities which integrated resorts offer Japan are immense: more taxes, more employment, more tourism. But the downsides are well known, jeopardizing the mental, physical and social health of local people.
The Japanese government, its partners in industry and the Japanese community need open channels of communication to share their concerns and goals and construct the best models to make sure integrated resorts in Japan are a success.
Dr. Ki-Joon Back is Associate Dean for Research and Graduate Studies and Eric Hilton Distinguished Chair Professor of Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston. Dr. Back has extensive consulting and research experience in casino-related areas.