National | VIEW FROM OSAKA

Osaka leaders revel as casinos bid for attention

by Eric Johnston

Staff Writer

When the Diet passed a law governing the operation of integrated casino resorts last month, public celebrations were few. Media polls showed strong public opposition to casinos, with respondents citing worries about problem gamblers and more crime.

But the champagne corks were popping in Osaka, where the smart money is on the city being one of only three locations where Japan’s first casino resorts will be built. With the legislative process over, international operators hoping to win an Osaka casino are stepping up local public relations efforts.

Though several casino firms have expressed interest in Osaka, America’s MGM Resorts and Hong Kong-based Melco Resorts and Entertainment are the front-runners to win the rights to an integrated resort. Executives from both firms have upped their local presence recently, attending festivals like the Tenjin Matsuri last month, donating money to victims of the fatal earthquake in June and hiring Japanese staff connected to politically powerful corporations in the Osaka region.

So far, there have been no headlines blaring “Osaka politicians wined and dined by casino representatives” or “Osaka bureaucrats received envelopes of cash from lobbyist tied to casino operator,” because Osaka has set rules that restrict official contact with casinos.

But an already intense lobbying campaign is expected to heat up as Osaka Gov. Ichiro Matsui pushes to pick one as soon as possible.

What will Osaka’s politicians, and their corporate allies, including contractors, hotels, and public relations firms, try to secure from casinos seeking to enter Osaka? Money and jobs, of course.

First, this means assistance for municipal transportation infrastructure projects like trains and subways to get customers out to the casino, which is expected to be built on Yumeshima, an artificial island in Osaka Bay.

Second, it means money for programs to treat gambling addiction.

Third, it means assistance for whatever other pet projects Osaka’s politicians can squeeze out of the casino.

Local leaders will also seek local hiring guarantees, and not just for blackjack dealers and floor managers. Before the Universal Studios Japan theme park opened in Osaka 2001, it faced pressure from corporate and political partners to offer “adviser” type jobs to various silver-haired men of dubious business ability who were owed favors by Osaka politicians or senior corporations.

Thus, it’s a sure bet that before a final decision is made that the bidding casinos will be sounded out by local politicians and business partners about hiring, at excellent wages, their friends who are politically connected but largely incompetent good ol’ boys. Merely to provide advice, of course, on how the casino can best deal with politicians, bureaucrats and senior corporate leaders who just happen to be old college chums or former co-workers.

Finally, to what extent can an international casino operator be involved with other aspects of an Osaka-based integrated resort? Should it concentrate on the card tables, roulette wheels and slot machines and let Osaka politicians and businesses deal with everything else related to the surrounding hotels, theaters, concert halls, restaurants and public spaces? Do local businesses have the smarts and savvy to make up for their lack of experience in the international casino hospitality industry? Or, is it better if the experienced casino operator be heavily involved in planning and managing other aspects of the resort to ensure it turns a profit?

Such questions are being debated behind the scenes. Osaka’s politicians are obviously thrilled at being courted by the international casino industry. But the ultimate success or failure of an Osaka casino resort depends on whether local leaders are smart enough to follow the advice of experienced international experts in order to avoid turning an integrated resort into yet another failed public works project.

View from Osaka is a monthly column that examines the latest news from a Kansai perspective.