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Osaka on leading edge of casino debate

City's fortunes improve as 'IRs' target Japan's ¥4 trillion jackpot

by Eric Johnston

Staff Writer

If Osaka Gov. Ichiro Matsui, Osaka Mayor Toru Hashimoto and their Osaka Ishin no Kai (One Osaka) members play their cards right, their gamble on casino legalization could hit the jackpot.

Over the past few months, the city has emerged as a favorite to become perhaps the first place in Japan to land a casino, if legalization succeeds. International casino resort operators have called on Matsui in particular, intrigued by the prospect of Osaka becoming the next major stop for international gamblers, or “gamers” if you prefer.

Just don’t call them casinos anymore — “integrated resort” is the term of choice for businesses and bureaucrats eager to promote the massive gambling complexes lining the streets of Las Vegas, Atlantic City, Macau and Singapore.

What exactly is an IR? Picture a hotel with thousands of rooms, sports areas hosting boxing matches or concerts, convention centers and exhibition halls showcasing everything from video game conventions to consumer electronics shows, and family-oriented theme parks based on films that even mom and dad like.

Add to this acres of French and Italian fashion shops and Michelin-starred gourmet restaurants owned by famously pretentious or foul-mouthed celebrity chefs. Oh yeah, there are also places to gamble. Those are indeed called casinos.

This is the concept that Japan, more specifically Osaka, hopes will become reality by 2019, just about the time that the excitement, or at least the Tokyo media buzz, over the 2020 Tokyo Olympics is building.

Last week, the Diet finally opened debate on the IR promotion bill submitted in December by a group of lawmakers hoping to pave the way for legalized gambling. More than 200 Diet members belong to a lawmaker alliance that supports casino gambling as part of integrated resorts.

How much money would IRs bring in? A report by CLSA, a Hong Kong-based independent brokerage and investment group, estimated that if two large IRs were completed by 2021, one in Tokyo and one in Osaka, and another 10 smaller resorts elsewhere were up and running by 2025, Japan’s gaming market would be worth about ¥4 trillion ($40 billion) annually.

Osaka is being approached by big U.S. resort operators like MGM Resorts International, whose top executives spoke to Matsui in May. For its part, the prefecture has plans to build a casino resort in the Osaka bay area. Yumeshima, site of Osaka’s failed 2008 Olympic bid, is considered the most likely location.

“The world’s top IR operators are very keen on Osaka. If these chairman and presidents were cool toward Osaka’s potential, they wouldn’t be coming,” Matsui told reporters last month.

Osaka envisions an IR on up to 30 hectares of land, over six times the size of Tokyo Dome. It would be 30 minutes or less from the city center or an hour from Kansai airport by train, and consist of a stadium, convention center, theater, concert hall, hotel with a casino, and shops and galleries.

Potential customers include East Asian tourists, especially Chinese, and those coming for international conferences or trade shows.

Investment would come from private sources. Use of the revenue would be decided by Osaka officials. Casino operators would pay a licensing fee to the central government, with the money, Osaka promises, to be used to combat crime and addiction problems.

The Diet bill attempts to address concerns by promising that organized crime will be kept out of the casinos, IDs will be checked, and that no one under 20 will be allowed in. Nor will casinos be built in close proximity to schools, and media promotion activities will be restricted.

Other possible restrictions, such as a limit on the number of times per day someone can visit a casino, maximum payoff levels and the banning of ATMs in the casino area, are also being discussed.

“I don’t think there are any demerits. Negative images of casinos include things like gambling addiction, public safety, etc. But Japan’s current policy includes treatment for those addicted to gambling on horse or motorboat racing, as well as pachinko addicts,” Matsui said.

The public remains wary of the push. Some opposition comes from traditional, small pachinko parlors who fear the competition, as well as educators, social workers, police and concerned parents worried about a rise in juvenile delinquency.

A joint survey by the city and prefecture of Osaka in March revealed that only 18 percent of respondents wholeheartedly support casinos and 38 percent would agree to them under certain conditions. Citing a potential crime wave, 21 percent said they were opposed. Local members of the Japan Communist Party and Social Democratic Party also remain opposed.

In the Diet, where the discussion on the IR bill is expected to continue into the autumn session, members of ruling coalition partner New Komeito are split on the wisdom of casinos, while the party’s main backer, the lay Buddhist organization Soka Gakkai, has expressed deep concern.

But late last month, New Komeito Acting Secretary-General Tetsuo Saito suggested party members might be allowed to vote on the IR bill individually, rather than vote the way the party decides.

“I have to study a bit more whether this is really a huge bill for local economic revitalization. I’ve got mixed feelings if it centers on casinos, but it’s OK for members who are really passionate about it to discuss it. Voting separately (from the party’s position) is also being mentioned,” Saito said.

Even if the legislative hurdles are cleared, local financial ones remain.

Access to and from Yumeshima, if that’s the location, would have to be upgraded and expanded. Who pays, Osaka or the central government, and how much the new road and bridge construction would cost, are likely to be the subjects of much debate that could well delay the opening date.

Finally, there is the “Tokyo political reality.”

With a Tokyo governor who is wary of casinos and eager to concentrate on Olympic preparations, and with most major casino operators looking first and foremost at Tokyo’s potential, there are fears the central government will put the brakes on regional efforts for casinos in order to prioritize the 2020 Summer Games. Which means no casinos until after 2020.

But for the first time in a while, Osaka is being noticed internationally for something other than inflammatory comments by Hashimoto about historical issues. Once home to ancient “bakuto” itinerant gamblers, from whom the yakuza claim their heritage, Osaka is being talked about from Singapore to Las Vegas as possibly the next East Asian destination for those who like to gamble.

Whether casino advocates can convince a wary public there’s a pot of gold at the end of the IR rainbow is still a risky bet, although judging by the past few months, the odds seem to be shifting in Hashimoto’s, and Matsui’s, favor.

  • Bogs_Dollocks

    Once a government starts talking about casinos, that is the clearest sign that it is bankrupt of ideas.

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