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Casino development still seen as risky even as three sites prepare to submit plans

  • September 29, 2021
  • , Asahi , p. 3
  • JMH Translation

By Tsusui Ryuhei and Takagi Shinya


The three locations [Osaka Prefecture/Osaka City, Wakayama Prefecture, and Nagasaki Prefecture] that plan to apply to host integrated resorts (IR), will draw up their IR development plans based on the selected operator’s proposal. These plans will then be submitted to the Japanese government between Oct. 1, 2021 and April 28, 2022. A committee comprising experts in economics, tourism, and addiction will evaluate the plans in terms of the increase in tourists and impact on the local economy. Based on the assessment, the Minister for Land, Infrastructure, Transport and Tourism will make a decision on whether to approve IR development in “a maximum of three locations.”


Sumitomo Mitsui Trust Research Institute Chief Researcher Otani Shota, who is an expert on IRs, says that “Osaka is certain to be selected from the standpoint of economic scale.” Otani says that the number of locations selected may be kept to a minimum to leave some leeway for an IR to be created in the Tokyo metropolitan area.”


A Ministry of Land, Infrastructure, Transport and Tourism (MLIT) official says “three locations may be selected or none may be selected.” The timing of the decision is “undecided,” according to the official.


The future of IRs will likely depend on COVID-19 and the political risks.


All three locations plan to open IRs in the latter half of the 2020s, but the number of foreign tourists has dropped drastically. It is unclear whether operations will proceed as planned.


Prime Minister Suga Yoshihide has taken the lead in promoting IR development within the government. In the Yokohama mayoral election in August 2021, however, Suga supported a candidate who was opposed to an IR. The winner of the election was also opposed to an IR. Yokohama withdrew its bid, leading to a loss of political capital for Suga.


Although attention will be focused on the government’s stance on IR development from now on, there was little debate on it during the LDP presidential election. Tsukasa Akimoto, a Lower House member, was sentenced to prison in September 2021 in a corruption case involving IR bidding. A government official said, “It’s hard to talk about IRs since there have been many incidents that have given people a negative impression of them.”


The Nagasaki governor will complete his term in spring 2022 and the candidates for his successor have yet to be finalized. An official at the Nagasaki Institute of Economic Research says that “Based on what happened in Yokohama, IRs may become an issue.”


Article 10 of the Act on Promotion of Development of Specified IR districts stipulates that government approval of IR districts is valid for 10 years (5 years for renewals). The law requires local governments to reapply to renew approvals. In order for a business operator to make such a major investment, it is essential that the IR can be operated stably for a long period of time. Renewals may not be approved, depending on the local government assembly or the head of the executive branch, at the time of reapplication. An official at a major bank that is considering financing an IR operator said, “We naturally recognize that that there is a risk of [IR] development running into difficulties.” (Abridged)

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