Posted on: March 16, 2022, 10:43h.
Last updated on: March 16, 2022, 10:43h.
Japan’s ruling political party is doubling down on integrated resorts. As potential host candidates ready their final presentations, the government is certain casinos will boost international tourism.
Japan is only a little more than a month away from concluding the latest phase of its integrated resort (IR) plan. Prefectural governments that want to become a host, such as Wakayama, Osaka and Nagasaki, will submit their projects by April 28.
The plan has not been without controversy. However, based on comments made by Prime Minister Fumio Kishida this week, opponents can forget about trying to block the government’s efforts.
Japan’s Future Lies in IRs
Kishida participated in a budget meeting on Tuesday with the House of Councillors. During the discussion, the conversation turned to IRs. The leader, who took over for Yoshihide Suga last October, reiterated his position on the role the casino resorts will play.
Casinos are going to be a huge part of Japan’s international tourism market, the Prime Minister asserted, according to GGRAsia. The IRs, and potentially other gambling options, will help draw more traffic, especially as the country rebounds from COVID-19.
The comments are a good sign for the prefectures and their casino partners. They seem to indicate that any opposition to the IR scheme will be cast aside.
It also could be an indication that the government will approve all three projects presented by Wakayama, Osaka and Nagasaki. Up to three licenses are available, but there is no guarantee that all three will be awarded.
Heavy Scrutiny for Projects
Even if all three of the prefectures present ideas that blow away legislators, they will still have to qualify as hosts. This means a lot of scrutiny of the prefectures, the locations where the IRs will be located and the casino partners.
Japan’s Minister of Land, Infrastructure, Transport and Tourism, Tetsuo Saito, brought this up during the budget meeting. He asserted that there will be an expert panel in place to review all of the projects and to break them down for their value.
The panel will review the financial stability of the prefecture and the casino operator, as well as the economic benefits the IR will provide. In addition, casino partners have to prove – beyond more than just what they can produce on paper – that they have the capacity to cover their financial obligations.
Casinos Austria, which Nagasaki selected as the primary operator of its IR, is going to have to invest a lot of money in the project. However, it hasn’t responded to calls to demonstrate how it can cover those costs.
Last month, it hinted at still working on securing the necessary funds. Clairvest Neem Ventures KK, Wakayama’s primary partner, is in a similar situation.
Skyrocketing Costs a Concern
The price of each IR project in Nagasaki and Wakayama exceeds $4 billion and is rising. The prefectures have to convince the expert panel that they have every detail under control. If not, all of the work they have put into the projects so far could be for nothing.
Osaka’s project is even more expensive. Just the initial investment will cost around $9.1 billion. MGM Resorts International and Orix Corp are each responsible for 40% of the budgeted amount. MGM might have deep pockets, but its financial commitment is still an astronomical figure.
Following the project submissions next month, Japan will begin its review. It will release the names of the final location or locations sometime in 2023.