- $25 billion dollar market for casinos to tap into hidden within Japan’s borders
- Companies have pledged up to $10 billion investment each for a slice of the Japanese market
For decades now, some of the world’s largest casino operators have leered hungrily at Japan as an untouched market for them to make their stamp and amass even greater riches. And with a market that could be worth up to $25 billion, it is not surprising
One company, Las Vegas Sands, pledged that it would invest at least $10 billion into setting up in Japan, demonstrating the vast interest that investors hold in its potential. However, the Japanese government is under pressure over what was a controversial law change to set about legalizing casinos. There is pressure to be seen to be minimising any harmful social affects.
But the payoff is expected to be huge, due to Japan’s proximity to China, a huge casino market, and domestically, where an astonishing $200 billion is wagered by Japanese annually on their slot machine and pinball hybrid game pachinko.
Seizing their chance
Last December, a law was passed that starts the process of making gambling legal, however, things are still a long way off. There is a second law that needs to be passed which will outline how the casinos will be regulated and that is not expected until later this year. It will then be a couple of years before bidding from casinos can begin.
Even with the ability to bid and gain potential licenses to open up venues in Japan, casino bosses are worried about the many limitations that the Japanese government will put in place to hold them back. One of these is a possible minimum percentage ownership by Japanese firms in the casinos. They are also worried that steep taxes could cut into profits, with estimates hitting the 17% mark. On top of this, there could be a long and difficult road of red tape and regulation for casino operators to try to negotiate which will also eat into the bottom line.
The no-gambling laws are deeply entrenched in Japan’s history; in 2000 the then-Governor of Tokyo, Shintaro Ishihara, spoke out about the need to build casinos and generate greater tourism.
One of the greatest arguments against his case was that the Japanese people have been so restricted from gambling over the years that they would then be too prone to problem gambling once the casinos did open. That seems contradictory, given the amount wagered on pachinko machines stands at 4% of the nation’s GDP as a whole.
Large foreign casino investors like Las Vegas Sands still may have a long road ahead of them.
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