GGRAsia – Japan okays three casinos in first wave, aims for May bill

Japan okays three casinos in first wave, aims for May bill

Apr 03, 2018 Newsdesk Japan, Latest News, Top of the deck

Japan’s governing parties have now agreed on nine out of 11 major issues regarding implementation of a casino industry in that country, including the key one of how many resorts should be allowed in the initial phase of liberalisation, according to information emerging from a Monday meeting of a steering group. At a previous meeting on March 27, they had only agreed on five out of 11 items.

A major area of compromise is they have now concurred there should be three resorts initially. The senior coalition partner, the Liberal Democratic Party (LDP), had wanted four or five in the first phase; the junior partner Komeito wanted either two or three.

The other areas where agreement has been reached since March 27 – over the course of two meetings respectively on Friday and Monday – were: the size of the gaming area for such resorts; the role of local government in the approvals process; and the need for the specifications for such resorts to flexible, so as to respond to market need and conditions.

A relative limit for the gaming area in such resorts – namely 3 percent of gross floor area – was approved, based on an LDP suggestion. Also per the largest governing party’s proposals, local governments would be given the ability to tailor plans for integrated resorts suited to their regions. Additionally, only mayoral approval would be needed for plans made at city level; those plans made at prefectural level would require consent of the local governor and local assembly.

The areas of policy regarding casino resorts where the governing parties had already reached agreement included: the number of weekly and monthly casino visits allowed for locals, the use of Japan’s My Number card for citizen identification for verifying casino entry; that there should be a five-member casino commission with membership ratified by parliament; and that there should be a minimum of red tape in the process leading to the opening such casino resorts.

As of the Monday meeting, one area of variation from the March 27 session was that the Integrated Resorts (IR) Implementation Bill should be reviewed by parliament seven years after its passage, rather than after five years, as had previously been proposed.

New meeting on Tuesday

At the latest two meetings the LDP maintained its stance that – even among the first wave of resorts – not only metropolitan areas should be considered as locations, but also regional centres, and that such integrated resorts should be sustainable in business terms and internationally competitive. Komeito stressed prudence and the importance of risk management in selecting operators and locations.

The remaining outstanding issues between the governing coalition – the level of admission fees to casinos for Japan citizens and residents; and the percentage level of tax on gross gaming revenue (GGR) are still to be decided. The issues will be discussed by the governing parties again on Tuesday (April 3) according to Japanese public broadcaster NHK.

The urgency of the need for consensus was highlighted recently when the LDP indicated following a March meeting that it considered mid-April as the absolute deadline for consensus if there were to be a chance of passing the Integrated Resorts (IR) Implementation Bill in the current session of Japan’s parliament, The session is due to end on June 20.

Now, according to GGRAsia’s understanding, the governing parties and the national government hope to submit the Integrated Resorts (IR) Implementation Bill around the time of Japan’s “Golden Week”. The period is a cluster of national holidays during springtime that span the course of a week, and this year runs from the very end of April into the first few days of May.

Regarding the two outstanding areas of difference between the governing parties, Komeito, the Buddhist-influenced junior partner of the coalition, maintained its demand for a JPY8,000 (US$76) fee, while the LDP broadly supports a national government proposal that it should be JPY2,000, but is willing for some flexibility on a higher figure, provided such a number were not an outlier in terms of other casino markets around the world.

Komeito’s suggested number is equivalent to the SGD100 (US$76) fee charged to locals for 24-hour access to Singapore’s casino resorts. The LDP suggested a ceiling should be the equivalent of US$47, which is approximately JPY5,000.

On the GGR tax topic, which remains an area of contention, the government has suggested it should either be fixed at 30 percent or operate on a sliding scale in the range of 30 percent to 50 percent of GGR. The LDP thinks such a tax should be fixed, but lower than 30 percent of GGR. Komeito has not nominated a percentage, but agrees with the principle of a sliding scale.