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ECONOMY

Local governments fret over IR construction as gov’t has not set basic policy

  • May 20, 2019
  • , Sankei , p. 1
  • JMH Translation

Local authorities are fretting over the construction of integrated resorts (IR) featuring casinos and are unable to formulate detailed plans concerning the opening of IR facilities, as when the state government will announce a basic policy, which will serve as the guideline for attracting an IR facility, remains unknown.

 

The IR implementation law, which was enacted in July 2018, stipulates that local municipalities will solicit and select IR operators according to the government’s basic policy and the government will designate up to three areas that can host IR facilities nationwide.

 

One leading candidate is Osaka Prefecture/Osaka City, which seeks to open an IR facility on Yumeshima, an artificial island in Osaka Bay a year before they host the World Expo in 2025. The opening of an IR facility in sync with the hosting of the World Expo, which is expected to draw a great number of people from around the world, “will create a tremendous synergy for the local economy,” said Osaka Governor Hirofumi Yoshimura.

 

While expectations for the opening of IR facilities are growing among municipalities, the central government remains non-committal. To set up a “casino management committee,” a prerequisite for setting forth a basic policy, the Diet is required to approve the committee’s five members. But with the Diet scheduled to close on June 26, a proposal for the selection of the committee members, which was expected to be submitted to the current session, has not been presented yet.

 

The task of the casino management committee will be to conduct stringent inspections regarding the IR licensing. The government is concerned that the casino issue may become a contentious point in this summer’s Upper House elections. Without a basic policy, municipalities cannot solicit and select IR operators, make a presentation to their assemblies or make other preparations essential to attracting an IR facility.

 

The government ordinance, which was approved by the Cabinet this past March to put in force the IR implementation law, states that hotels and MICE (meeting, incentive tour, convention/conference and exhibition) facilities must exceed leading domestic facilities in floor area and capacity. Even though large IR facilities are built, these facilities may not be able to produce profits if they are not opened promptly. Nonetheless, the government takes the position that “we have no definite schedule for the opening of IR facilities,” said an official from the Cabinet Secretariat.  

 

Speculation is growing that “full-fledged preparations will start after the Upper House elections” as the government and the ruling parties do not want to be criticized over the IR issue. (Abridged)

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