Strict conditions for Japan’s first casino licenses

Japan’s government has set the course for the first legalization of land-based casinos on domestic soil. Yesterday, Tuesday, the standards were set for the three casino resorts to be built, which in terms of equipment and number of beds will reach the dimensions of the large resorts of Las Vegas and Macau.

Strict requirements for casino resorts

In order to obtain one of the lucrative casino licenses, operators must meet a number of strict conditions: According to this, the integrated casino resorts must have at least 100,000 m² of hotel room space next to the gaming tables and machines.

Pachinko Gaming Hall

Experts, therefore, expect the hotels to have up to 2,000 rooms. There will also be conference rooms with a minimum capacity of 3,000 visitors and at least 60,000 m² of exhibition space for trade fairs and events.
Further shopping and entertainment opportunities, as well as gastronomy offerings, will round off the offering and pave the way for resorts from pure gambling to comprehensive entertainment facilities.
Compliance with the standards is to be monitored by a special control authority for casinos. However, it will still take a while, because the three resorts are expected to open in the middle of the next decade and will then be distinguished by “incomparable quality”, the government hopes.

Limited interest in Japan

In Japan, prefectures must apply as locations. Despite the expected tourist flows and revenues in the billions, only three of the 47 prefectures comparable with the German federal states have so far expressed interest: Osaka, Nagasaki, and Wakayama.
The main reason for the reluctance of the regional governments is concerns about the effects of gambling on their own population. For this reason, those responsible are hesitant with their application despite the chance of additional jobs and tax revenues.

To protect Japan’s population from the dangers of gambling addiction, the government is considering a number of measures to limit Japanese players’ access to the new casinos. In addition to an entrance fee of 55 US dollars to be paid by locals only, the government is also considering limiting the number of monthly visits.
This will later be monitored through player registration and technical devices such as automatic face recognition at the casino entrances. Regardless of where they are located, the casino resorts will also be subject to strict advertising requirements. For example, they may only advertise their gambling offers on their own premises and in the transit zones of airports and seaports.
In this way, the government wants to prevent the casino companies from focusing their marketing activities on the local population and instead primarily addressing international guests.

US companies in the starting blocks

Currently, there are increasing signs that Osaka will be the region in which Japan’s government will legalize the country’s first integrated casino resort. Jim Murren, CEO of the MGM Group, is also counting on the Osaka location. If MGM resorts are licensed, he expects an investment volume of 8.5 billion US dollars.
At the same time, the CEO of MGM Resorts does not anticipate a rapid licensing process. Instead, he predicts that Japan’s authorities will take their time with the decision until early 2020. This would give MGM enough time to focus on the application.

Jim Murren told Bloomberg intelligence:
“We have decided to fully focus on Osaka, where we believe the first casino resort will be licensed.”

In addition to MGM, other US gambling companies have expressed interest in operating one of the Japanese casinos. In particular Caesars, Hard Rock and the Las Vegas Sands group of billionaire Sheldon Adelson expect good chances for a license.

Las Vegas Sands has with US President Donald Trump a prominent advocate. Allegedly, during consultations with Japan’s Prime Minister Shinzo Abe, he had already advocated the granting of a license to the Sands Group.
The announcement had caused a stir in the USA, as Sands owner Adelson is one of the biggest financial supporters of Trump and the Republicans. With Japan’s government likely to allocate only one of the three licenses to US corporations, observers expect a fierce competition for the lucrative license where the smallest advantage can ultimately decide.