Abes political gains help odds of Japan legalising casinos

The Japanese public opposes casinos by 2-to-1 on concerns such as gambling addiction, yet insiders say political momentum has shifted in favour of the latest in a string of bills proposing to legalise them.
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Oct 18, 2016, 07.54 AM | Source: Reuters

Abe's political gains help odds of Japan legalising casinos

The Japanese public opposes casinos by 2-to-1 on concerns such as gambling addiction, yet insiders say political momentum has shifted in favour of the latest in a string of bills proposing to legalise them.

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Abes political gains help odds of Japan legalising casinos

The Japanese public opposes casinos by 2-to-1 on concerns such as gambling addiction, yet insiders say political momentum has shifted in favour of the latest in a string of bills proposing to legalise them.

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Abes political gains help odds of Japan legalising casinos
Moves to allow casinos in Japan have failed for 15 years, but the chance of success has improved sharply, people involved in the effort say, thanks to political shifts that could open the world's next great frontier for high-roller gambling. The Japanese public opposes casinos by 2-to-1 on concerns such as gambling addiction, yet insiders say political momentum has shifted in favour of the latest in a string of bills proposing to legalise them.

Companies from Las Vegas Sands Corp to domestic game-machine maker Sega Sammy Holdings Inc stand to benefit if casinos come to what CLSA estimates could be a USD 40 billion annual market, the world's second-biggest after the United States.

"Integrated resorts will be a headline attraction for Japan's growth strategy," Prime Minister Shinzo Abe said in 2014, referring to projects that combine casinos with hotels, shopping and conference facilities. "We will continue to consider them from the viewpoint of how to attract people from around the world."

A landslide July election win for Abe's Liberal Democratic Party, the elevation of key gambling proponents in the LDP, division in Abe's junior coalition partner and a relatively uncrowded parliamentary schedule all increase the likelihood casinos could finally get the nod.

"There's a near 100 percent chance" of the bill being debated in the session ending Nov. 30, said Hiroyuki Hosoda, head of the main pro-casino parliamentary group and one of three casino proponents recently named to top LDP spots.

LDP DOMINANCE

If the bill makes it to committee, it is virtually assured of success given the LDP's dominance of both houses of parliament.

Backers say casinos would boost tourism, a success of "Abenomics". A sharp fall in the yen under easy-money stimulus and relaxed visa rules have led to a flood in visitors, especially from China, since Abe swept to power in December 2012.

Foreign tourists surged to 19.7 million last year from 8.4 million in 2012, but Abe's target of 40 million a year by 2020 and for doubling the 3.5 trillion yen (USD 34 billion) they spend annually is under threat.

With the yen rebounding over the past year and visitors spending less per person, a second wind for tourism could help Japanese banks, manufacturers, construction firms and travel agencies.

Japan already has gambling aplenty, from ubiquitous "pachinko" pinball halls - officially tolerated despite a hazy legal status - to government-backed betting on horse, boat and bicycle races. But these pastimes tend to be low-stakes and aren't popular with the deep-pocketed foreign visitors Japan covets.

The public also isn't on board, with opinion polls in recent years indicate casino opponents outnumber supporters by around 65 percent to 30 percent. Still, with support for Abenomics robust, the premier has used his political clout to push through other unpopular measures, such a more assertive military and a tough official secrets act.

GROWING MOMENTUM?

Though reticent to discuss their lobbying efforts, Las Vegas Sands, MGM Resorts International and Caesars Entertainment Corp said they are watching political developments in Japan with interest.

"We are encouraged by what seems to be growing momentum for integrated resorts in Japan," Steven Tight, president of international development at Caesars, told Reuters.

Beneficiaries in Japan would include machine makers Sega Sammy and Konami Holdings Corp , as well H.I.S. Co Ltd , a major travel agency jockeying to develop a casino in southern Japan, said Jun Kitazawa, an analyst of Miki Securities Co.

Sega Sammy expects a "constructive debate" in parliament, said spokesman Hiroyuki Komine.

Casino proponents are right to be cautious: previous hopes have been dashed as bills languished in parliament, victims of a busy legislative calendar, as well as to opposition from some elements of Abe's coalition.

But those barriers have fallen in recent months, three advocates of casinos say.

In a July election, Abe's LDP secured a majority in the upper house of parliament. It can now enact laws without junior partner Komeito, which is split on casinos.

In August, Abe picked 77-year-old veteran lawmaker Toshihiro Nikai as number two in the LDP, replacing a lawmaker seen as cautious on casinos. According to the three advocates, Nikai's elevation, along with Hosoda and Toshimitsu Motegi to top LDP posts, mean it's more likely the casino bill will reach the committee.

Nikai is considered close to LDP partner Komeito and will ensure the Buddhist-backed party is placated to ensure the bill's passage, the three say. The LDP will want Komeito's help on legislation to implement any law legalising casinos.

"He's considerate towards Komeito, that's his greatest strength," Deputy Chief Cabinet Secretary Koichi Hagiuda, a casino supporter, told Reuters. "In that sense, momentum (for the casino bill) is building."

(Reporting by Thomas Wilson and Emi Emoto; Additional reporting by Farah Master in Hong Kong; Editing by William Mallard and Richard Borsuk)

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