Japan is on the brink of making a crucial decision regarding the applications for integrated resorts (IRs) from Osaka and Nagasaki. Experts and industry insiders believe that the decision will be made in the coming months, possibly as soon as this month. The outcome of this decision will shape the future of the IR landscape in Japan and may even pave the way for a supplementary round of applications involving prime locations such as Tokyo and Hokkaido.
The Elusive Decision:
The process of legalizing casinos in Japan has been in the works for several years, with the last enabling legislation passed in 2018. Since then, Osaka and Nagasaki submitted their bids for IRs in April of the following year. However, progress on the evaluation of these bids has been shrouded in uncertainty, with no updates from the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for the past 10 months. Experts attribute the delay to the unique complexities of Japan’s legal structure and the meticulous approach taken by the authorities.
The Roadmap Ahead:
While a concrete timeline remains elusive, insiders predict that significant progress will be made in the second half of the year. Speculation arises around the possibility of a decision coinciding with the end of the fiscal year in March or announcements during the local elections in April. The political landscape and the desire to avoid controversial issues leading up to the G7 summit in May may also influence the timing of the decision. Despite the delays, it is widely believed that the implementation of the IR law is inevitable and that the government remains committed to the process.
Challenges Faced by Osaka and Nagasaki:
Osaka and Nagasaki, the two jurisdictions competing for the authorized IR licenses, face unique challenges in their applications. In Osaka, the chosen IR site, Yumeshima island, must address soil liquefaction and contamination issues. While the Osaka government has allocated significant funds to mitigate these problems, concerns persist. MGM Resorts International and Orix estimate the cost of their Yumeshima IR at $8.5 billion, with a projected opening in 2029. Nagasaki’s $3 billion IR proposal, led by Casinos Austria International, faces questions regarding leadership, ownership, financing, and the scale of the project.
Implications of a Decision:
If the current applications from Osaka and Nagasaki are approved, it raises the question of what will happen to the remaining IR license(s). The IR law stipulates a waiting period of seven years before issuing additional licenses after the initial three licenses are granted. There is speculation that MLIT may approve one or none of the proposals and potentially open the door for a supplemental round of applications. Both the national government and localities are closely observing the outcomes of the current applications before committing to further IR processes.
Prospects of a Supplemental Round:
Hokkaido, which initially deferred its bid for an IR due to the need for an environmental impact study, could potentially enter a supplemental round if it decides to proceed. With local elections approaching and the completion of the impact study, Hokkaido’s interest in unlocking its year-round tourism potential through an IR remains high. Tokyo, despite previously passing on an IR bid, may also consider participating in a supplemental round. The appeal of the Kanto region, coupled with the absence of neighboring Yokohama from the competition, could make Tokyo an attractive contender.
Operator Perspectives and Commitment:
Although some operators have withdrawn their bids due to political shifts and uncertainties, Hard Rock Japan remains committed to its IR plans. Hard Rock emphasizes the need for a world-class premier destination resort in Japan and expresses confidence in the country’s.