The 2018 Japan Gaming Congress in Tokyo saw a large crowd of hundreds of industry and government professionals coming together to discuss what was, at that time, the most exciting new casino gaming jurisdiction on the planet.
Key industry stakeholders ranging from high-ranking politicians to global integrated resort operators, gaming product suppliers, potential investors and expert commentators discussed the major issues to be navigated along the path to Japan’s first IRs. The event followed the passage of the IR Promotion Bill in 2016, and the subsequent IR Implementation Bill passed just weeks after the JgC that year.
To highlight the huge level of interest generated at the time and in the 18 months which followed, Inside Asian Gaming ran a detailed overview of the status of Japan’s IRs in our January 2020 edition. The deep dive of several thousand words analysed no less than 12 prospective IR locations and 20 candidate operators to have expressed an interest in Japan.
Fast forward 18 months, and that number has plummeted to just four remaining candidate locations (one of which was recently toying with pulling out) and seven candidate operators between them.
So how did it come to this?
We all know that COVID-19 hasn’t helped. The high cost of development in Japan combined with financial pressures brought about by temporary property closures globally has forced a number of operators to withdraw in order to focus on keeping current operations afloat. But that’s not the only reason.
The departure of Las Vegas Sands in May 2020, citing regulatory impediments, sent shockwaves through the industry while serving as a precursor of what was to come.
Since then, Wynn Resorts and Galaxy Entertainment Group – who like LVS had also been looking at Yokohama early on – have withdrawn too, leaving just two candidate operators, Genting Singapore and Melco Resorts, to fight for the Yokohama IR opportunity. That’s assuming, of course, that the upcoming mayoral election in August doesn’t result in the city’s IR plans being scrapped altogether — by no means a safe assumption.
Just two years after six major international IR operators exhibited at a tourism trade show in Osaka, only one of them, MGM Resorts, is left taking part in that city’s RFP.
Wakayama officials recently named Clairvest as the prefecture’s operator partner, but only after its one other bidder, Suncity Group, withdrew at the last minute.
Nagasaki remains the only location to have generated a genuine field of candidates competing at the RFP endgame, with the five submissions early this year now being whittled down by the prefecture to three candidates remaining.
So where did it all go so wrong? There are endless reasons, from the huge cost of development that for the most part seems to hinder any reasonable ROI, to the selection of regional locations far away from major population bases, seemingly oversized MICE and hotel requirements and strict limits placed on the size of gaming floors – naturally the most profitable areas for operators. Even additional infrastructure development, surely the responsibility of governments wanting to boost local tourism, is now being included as an additional cost to operators.
Time will tell how Japan’s IR ambitions play out, but it’s looking increasingly unlikely that the reality will match the dream.
