Japanese government approves regulations for planned casinos

By opening casinos, Japan “will seek to become an advanced country for tourism,” the Prime Minister Shinzō Abe said at his residence Tuesday.

The government hopes gambling resorts will provide a new source of tax revenue. Japan legalized casinos in 2016 and passed another bill in 2018 that laid out a roadmap for gaming.

Although the goal was to have the first casino open by the time Tokyo hosted the 2020 Summer Olympics, wrangling over regulations and public concern over compulsive gambling has pushed back the plans, The Edge Markets reports.

The Japanese plans could open the way for billions of dollars in investment from the likes of MGM Resorts International and Melco Resorts & Entertainment Ltd. Japan, which already has horse racing and other forms of legalized gambling, is a late entrant into the Asian casino market, with Macau being the region’s most powerful center.

The latest Japanese regulations approved Tuesday specify the size of the hotels, conference facilities and exhibition centers that must be part of the gambling resorts.

The regulations include the following:

• The guest-room area of the hotel must be at least 100,000 square meters (1.1 million square feet)
• The minimum size of the convention and exhibition centers will be calculated together, with a larger convention center allowing a smaller exhibition center
• The area for the casino must make up no more than 3% of the total area of the resort
• Operators will be obliged to report to the government any customers who make transactions of 1 million yen (US$9,080) or more in cash
• Gambling resorts will only be allowed to advertise in international airports and cruise ship terminals

Casino ads will be banned in all other areas outside the vicinity of each integrated resort. The restriction reflects the government’s aim to reduce Japanese citizens’ exposure to such ads in an effort to ward off gambling addiction.

Rules set under the enforcement order, which was approved at Tuesday’s Cabinet meeting, will take effect one after another starting Monday, the Japan Times reports.

The standards adopted at the meeting for casino resorts due to be built by the mid-2020s also require operators to host hotels far larger than those that currently exist in the country, along with conference rooms and exhibition halls.

With hotels required to secure more than 100,000 square meters for guest rooms, local governments aiming to bring such resorts to their municipalities will need to cooperate with business operators capable of making such massive investments.

Japan will aim for casino resorts of “unprecedentedly large scale and high quality,” Prime Minister Shinzo Abe told a government meeting on the issue prior to the Cabinet approval.

The requirement for hotels was based on the size of overseas casino resorts built over the past decade. With the average-sized Japanese guest room requiring 50 square meters, such a hotel would necessitate 2,000 rooms, exceeding the average of 1,500 at three major luxury Tokyo hotels.

As for the sizes of conference rooms and exhibition sites, operators will need to fulfill one of three combined numerical criteria, which include a convention center that accommodates 3,000 people with a 60,000-square-meter exhibition space.

Tokyo Big Sight currently has the country’s largest exhibition floor space of 95,000 square meters, while the nation’s largest conference halls, the Tokyo International Forum in Tokyo and the Pacifico Yokohama, hold around 5,000 people.

The maximum floor space for casinos should be 3 percent of the integrated resort’s total space, according to the regulations.

A recent Kyodo News survey, covering all of Japan’s 47 prefectures and 20 major cities that are eligible to host the newly legalized resorts, found that only three areas — the prefectures of Osaka, Wakayama and Nagasaki — plan to apply for the government’s screening of host sites.

With the adoption of the enforcement order, local governments wanting to host casino resorts and businesses eager to operate such facilities are expected to speed up related preparations.

The central government will set up a committee for supervising casinos.

The tourism minister will lay out a basic policy for resort development, possibly this summer.

After that, local governments will select resort operators and work with them to jointly devise and submit development plans.