Japan’s Parliament approves Casino International Resorts Bill

 

Japan’s parliament passed a bill legalizing casinos early on Thursday, paving the way for billions of dollars of potential investment after years of political wrangling.
 

The revised casino bill was passed in both houses, Kyodo News reported, after hours of delaying tactics by the opposition. Details of the so-called integrated resorts must be laid out in a separate implementation bill before any casinos can be built -- meaning none are likely to open their doors in time for the 2020 Tokyo Olympics.
 
International gaming companies have been mulling investments in Japan amid a boom in tourism, particularly from China. Wynn Resorts Ltd, MGM Resorts International and Las Vegas Sands Corp. are among the operators that have expressed interest. Opening two integrated resorts in major population centers could bring in $10 billion in revenue, with potential for $30 billion if they spread across the country, according to a report by CLSA this month.
 
“This is a landmark occasion and should be a shot in the arm as it relates to investor sentiment in all gaming names that could be players in Japan,” Grant Govertsen, an analyst at Union Gaming, said in a research note.
 
Yokohama and Osaka have been touted as potential venues for the first casino resorts, while Tokyo Governor Yuriko Koike has not come out clearly in favor of a venue in the capital.

The bill, sponsored by a group of lawmakers mainly from the ruling Liberal Democratic Party, would allow casino gambling in “integrated resorts” that include hotels and entertainment facilities.

It cleared the House of Representatives on December 6 but was subsequently altered.

Opponents of the bill, including members of Komeito, the junior partner in the ruling coalition, have argued that casinos could worsen problem gambling and compromise public safety.

Party leader Natsuo Yamaguchi was among the Komeito lawmakers who voted against the bill in the upper house after the party allowed a conscience vote.

Opposition parties have also railed against what they see as steamrolling of legislation through the current Diet session, which was extended for two weeks from the originally scheduled November 30 end by the ruling coalition

Wednesday’s upper house plenary session went into recess in the afternoon after the Democratic Party submitted a censure motion against Prime Minister Shinzo Abe. But the chamber’s steering committee decided not to deliberate the motion, allowing the debate over the casino bill to resume and a vote to be held.

The Democratic Party, Japanese Communist Party, Liberal Party and Social Democratic Party submitted a no-confidence motion against the Abe Cabinet in the House of Representatives as a way of obstructing action on the bill.

“[The casino bill] threatens the dignity of the legislature, so we want to find a way for it to be scrapped,” Democratic Party leader Renho told a party meeting on Wednesday morning.

Also Wednesday morning, the secretaries general of the LDP and Komeito agreed to consider extending the Diet session by around two more days, buying time to pass the casino bill.

However, any further extension of the current session will overlap with Abe’s meetings with Russian President Vladimir Putin in Japan on Thursday and Friday.

The casino bill cleared the upper house’s Cabinet Committee on Tuesday after its executive members agreed to hold a vote on the condition that alterations were made, including enhanced provisions to combat problem gambling.

The original version of the bill passed the lower house on December 6 after just a few hours of deliberation.

Legislation on pension reform, which the opposition has also protested, was enacted Wednesday afternoon after a vote in the upper house. It had passed a vote in the chamber’s health, labour and welfare committee the day prior without any alterations.

International gaming companies have been mulling investments in Japan amid a boom in tourism, particularly from China. Wynn Resorts Ltd, MGM Resorts International and Las Vegas Sands Corp. are among the operators that have expressed interest. Opening two integrated resorts in major population centres could bring in US$10 billion in revenue, with potential for US$30 billion if they spread across the country, according to a new report by CLSA this month.

“This is a landmark occasion and should be a shot in the arm as it relates to investor sentiment in all gaming names that could be players in Japan,” Grant Govertsen, an analyst at Union Gaming, said in a research note.

There was little movement in casino-related stocks in Tokyo ahead of the vote.

South China Morning Post with Additional reporting by Bloomberg