International edition
September 29, 2020

Universal Entertainment Corp says

Japan lacks will to legalize casinos

(Japan).- Japanese government lacks the will to legalize casinos, a move that could generate tax revenue at a time when slumping corporate profits have depleted such receipts, pachinko maker Universal Entertainment Corp. commented this week.

In Japan, politicians are very weak in showing the will to do something,” said Kazuo Okada, chairman of Universal Entertainment, the biggest shareholder of Wynn Resorts Ltd. “Casinos should be opened, against the backdrop of employment and tax revenue problems,” he said in an interview this week in Singapore.

Prime Minister Yukio Hatoyama’s ruling Democratic Party of Japan hasn’t taken up the topic of legalizing casinos since coming to power in September. The previous government, led by the Liberal Democratic Party, didn’t submit a bill legalizing casinos partly because of the global financial crisis, said Paul Bromberg, chief operating officer of Spectrum OSO Asia Ltd.

“Before the election, before the economic problems last year, I was quite bullish and thought certainly by 2010 they might have legalized,” Bromberg said in a Bloomberg Television interview this week. “Then of course, now we’re coming into 2010 there’s no sign of legalization.” Japan’s government has been talking about making casinos legal for 10 years, he said.

Spectrum does corporate investigations and consults for clients in the gambling industry.
Universal Entertainment rose 3 % to close at us$ 14.8 in Tokyo trading. That boosted its climb this year to 44 %, compared with a 13 % gain for the benchmark Nikkei 225 Stock Average.

Japan’s government said December 1 it will compile a spending package to fight deflation and the stronger yen, which could hurt manufacturers as the nation recovers from its worst postwar recession. Tax revenue in the world’s second-biggest economy fell 22 % between April and October. Receipts could fall to us$ 421 billion this year, as much as us$ 103.3 billion lower than what the government initially projected, two Finance Ministry officials said on November 16.

Pachinko is played by about 13 % of Japan’s population, who fed us$ 241.1 billion into the pinball-like machines last year, according to the government’s Leisure White Paper.

Japan is the world’s biggest gambling market on a per capita basis, Felix Ling, chief consultant of Platform Asia Management Services, said today. Ling was a consultant to the Singapore government after serving as marketing general manager for two casinos in Macau, the world’s biggest gambling hub. These casinos are the Sands Macao and Galaxy Entertainment Group Ltd.’s Starworld property.

Revenue per visitor in Las Vegas is about us$ 690, according to Ling. That’s less than half the estimated us$ 1,900 value for Japan, according to Bloomberg calculations using the government’s data and the IMF’s population estimates.

In Singapore, the government awarded two casino licenses in 2006, about two years after it first considered legalizing such outlets, to boost tourism and create jobs. Two casino resorts, built and managed by Las Vegas Sands Corp. and Genting Bhd., are scheduled to open in the first quarter of next year. Okada wants the government to allow casinos soon because he faces a shrinking Japanese market and delays for plans to open an outlet in the Philippines.

Universal Entertainment is lobbying the Philippine government to let it own more than the 40 %cap on foreign ownership of property, Okada said. The company plans to spend about us$ 2.2 billion to build and operate a casino in Manila. “If approvals are made officially, we are ready to begin construction quickly,” Okada said.

Outside Asia, Universal Entertainment also plans to “aggressively expand” its business in the U.S., seeking opportunities as rivals review their operations amid the downturn. The Japanese company aims to sell 10,000 gaming machines over the next year, marking its return to the U.S., a market it exited 30 years ago, Okada said.

Universal Entertainment’s investment in billionaire Stephen Wynn’scasino operator is helping the company make a comeback to the U.S., Okada said. “Since we were away for a long time, the Nevada Gaming Control Board wasn’t sure of our existence, so having such a great partner did help us a lot,” he said, referring to the gambling regulator.

Aruze Corp., the previous name of Universal Entertainment, is the biggest shareholder of Wynn Resorts, at 19.9 %, according to Bloomberg data. Wynn has an 18 % stake. “At the time, we had invested about us$ 574 million. Now, we have gotten back almost all of this in the form of dividends,” Okada said. “If there is a chance, we would like to increase our stake.”

Okada is also a Wynn vice chairman. He had said in an August 2007 interview that he and Wynn would submit a joint bid to operate casinos in Japan if they’re legalized. Pachinko players seek to amass small steel balls that can be exchanged for prizes such as stuffed toy animals instead of cash, because casinos are illegal in Japan. The prizes can usually be exchanged for money at booths found just outside pachinko halls.

Japan’s 13,000 pachinko halls - more than one for every 10,000 residents - are located throughout the country around train stations, along highways and in entertainment areas.

What is your opinion about this article?
  • I like it
    0 votos
  • I don't like it
    0 votos
  • I have not thought about it
    0 votos
Leave your comment
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.
Follow us on Facebook