The Era of Japanese Integrated Resorts Has Begun

By Ben Hamill - December 29 2016

The Japanese gambling law that finally permitted casino gambling after so many years of controversy, discussions in Parliament, forward steps, backward steps, and no steps at all has passed the Diet. It now needs to be implemented. This brings to a close the long process of constructing a law that could pass the legislature and opens a new chapter in the history of Japanese society.

The law that passed calls for Japan to build Integrated Resorts (IRs), following the recent lead of Singapore which has had IRs for only about ten years. IRs combine many elements of tourism, business, shopping, and gambling to create a complex that does not emphasize the gambling side but allows it. In this way, IRs enhance government revenue through rents and taxes.

Tourists will be able to stay at luxury hotels. There will be shopping centres at every IR so local people as well as guests can avail themselves of the convenience of shopping without even stepping foot in the casino. Local and international conventions and conferences will find top-level accommodations for all their needs. The casino will offer an unobtrusive place where locals and tourists can enjoy a little gambling entertainment. Convention goers in need of a break from the more serious reasons they're attending the conference can avail themselves of the casino as well.Japan Garden of Flowers

Casinos are a major gambling venue in many other countries; Japanese gambling law made said casinos illegal. The Japanese do, however, have a long history of allowing some forms of gambling. Pachinko is a kind of pinball game that is immensely popular in Japan. By way of a loophole in the financial side of winning at Pachinko, it was always considered a mere game by the law rather than a gambling game. Quirks in Japanese gambling law also have long allowed racing (horses and boats), lotteries, and some sports betting. Casinos were considered too far gone down the road to gambling to ever be considered legitimate.

There was a great deal of controversy in the years leading up to the law's passage. Many political parties did everything they could to delay voting on the law. Opposition parties functionally closed down discussions as recently as 2013. The Japanese public has long been and remains primarily opposed to casinos.

Ironically, the law that was just passed only gives the government of Prime Minister Shinzo Abe a year to address some of the problems entailed in the establishment of casinos. As it stands, the law needs to be complemented by further legislation to address questions the law did not address.

One of the biggest obstacles casinos faced in just getting the law to this point is the problem of gambling addiction. Even Pachinko is said to have its addicts and casino gambling, according to passionate opponents, is guaranteed to cause much more gambling addiction. It is estimated that there are, in fact, about 5,000,000 problem gamblers in Japan already. The President of the Society Concerned about Gambling addiction, Noriko Tanaka, said, "Politicians claim they are concerned about a rise in gambling addicts. But the current bill is insufficient in resolving those problems and needs to be revised."

Some have indicated that the ruling coalition forced this legislation through in a cynical concession to the need for more government revenues. The Japanese economy has been stagnant for many years and casinos have shown the ability to generate money for the government in other places. A major Japanese newspaper said that by profiting from gamblers' losses, casinos reflect the worse aspect of business. Others have said that they fear the takeover of casinos by organized crime.

The need for further legislation, the bureaucracy that will undoubtedly be set up to effect the decisions based on the new law, and unforeseen delays mean that it is already assumed that no casinos shall have been built by the time the 2020 Summer Olympics, with their massive influx of tourists, will take place in Tokyo!

The Singaporean experiment in IRs is what sparked Prime Minister Abe to renew discussions about casino legalization. He visited an IR in Singapore last year and was so impressed that he was determined to push the new law through the Diet despite the still strong opposition to it.

An IR is a complex of high-end hotels, shopping, convention centres, and many other amenities that, it is fervently hoped, will attract only the highest class of international gamblers and will deter organized crime from trying to take over the casinos. In Singapore, the casinos are underground, there are no neon lights attracting tourists, and gambling is intentionally subdued.

A Japanese IR will likely be a partnership between Japanese business interests and foreign business interests. Takashi Kiso, a consultant and CEO of the International casino Institute, says that, "there's a lot of resistance to 100% foreign-owned casinos." As an expert in such matters, it is likely that he is correct.

There continues to be strong public opposition to the whole idea of casinos, within IRs or not. A poll conducted since the law was passed showed Prime Minister Abe's party losing 6% support in a single week. It truly remains to be seen whether Abe can push the needed second legislation through the Diet. The vagaries of Japanese lawmaking mean that it must go through several processes before it can be passed. There is always the possibility that Prime Minister Abe's party will be defeated and removed from power before any continuing legislation can be passed and the whole project will die aborning!

So, this is far from a fait accompli. In fact, the only thing in this entire matter that can be called a fait accompli is that Prime Minister Abe has rejuvenated the opposition to his party, his rule, and the fate of casinos in Japan!