International edition
October 15, 2021

In the hope of increased tax revenues and tourism

Japan bets on casinos to fund earthquake recovery

(Japan).- A cross-party group of Japanese MPs wants to legalise casinos in the hope of increased tax revenues and tourism, and put them on the same legal footing as betting on horse, speedboat and bicycle racing. Croupiers and poker players could fuel Japanese recovery from the March earthquake and tsunami as the country moves closer to legalising casinos.

T

he cost of rebuilding the north-east coastline, estimated at us$ 245 billion, has given fresh impetus to the campaign, which has the support of a growing number of influential politicians including four former prime ministers. Members of the 150-strong group have met senior police officials in an attempt to calm fears that casino resorts of the kind springing up elsewhere in Asia will fall under the influence of the yakuza – Japan's answer to the mafia.

"Some members of the Diet are now insisting that casino legislation be passed," according to Gaming Capital Management, a US-based group that funds casino construction. "Casinos are a great taxation source and can contribute a lot under current financial difficulties related to the earthquake recovery process."

Issei Koga, an MP from the governing Democratic party of Japan and leader of the group, said casino resorts would be "enormously strong engines" for generating international tourism.

The 11 March disaster and the accident at Fukushima Daiichi nuclear power plant sent visitor numbers spiralling earlier this year. Inbound tourism has recovered, but Japan could struggle to achieve its aim of attracting 25 million visitors a year by 2020. Las Vegas Sands, which opened a luxury casino resort in Singapore in 2010, has had its sights on the potentially lucrative Japanese market for several years.

A 2009 study by Osaka University of Commerce found that casino resorts could be worth us$ 44 billion a year. The promise of bigger tax revenues in the midst of an economic crisis appears to be winning over politicians who had voiced moral objections to Macao-style casinos.

Supporters point to the Singapore complex, which includes the world's most expensive hotel, as proof that casinos can operate without attracting organised crime or creating gambling addicts.

Singapore Marina Bay Sands, which boasts 1,500 slot machines and 600 gaming tables, is expected to help generate about us$ 1 billion in gaming taxes this year, according to one estimate, while Macao's casinos could give the government us$ 13 billion. "There is more momentum and greater optimism than there has ever been in the past," George Tanasijevich, the company's representative in Japan, told Bloomberg.

The move has the support of Tokyo's governor, Shintaro Ishihara, and Toru Hashimoto, the mayor of Osaka, who wants to use casino revenue to fund welfare programmes. Other forms of gambling in Japan, together with pachinko, a pinball derivative played by 18 million people, generated us$ 322 billion last year, according to the Japan Productivity Centre.

Pachinko, in which prizes are exchanged off-premises for cash, generates us$ 32 trillion a year – more than Japan's top five carmakers put together. Japanese parliament would have to pass a law to nullify the ban on casino gambling, and some commentators believe the pro-casino lobby could struggle to win over the public after two high-profile gambling scandals.

The traditional sport of sumo was rocked by revelations last summer that dozens of wrestlers had gambled illegally on professional baseball matches, with members of the yakuza acting as bookmakers.

Mototaka Ikawa, the former chairman of Daio, a leading paper maker, has been in the headlines amid allegations that he used more than us$ 5.8 billion borrowed from the firm's subsidiaries to fund trips to casinos around the world.

"The media has been running stories about how certain people become easily addicted to gambling, and in addition to wrecking their own lives in spectacular fashion, ruin the lives of others. That's great ammunition for the anti-casino crowd," says Mark Schreiber, a media commentator who writes about social trends.

He is not convinced that casinos will aid tsunami reconstruction, even if MPs find time to debate a gambling bill. "By the time the casino resorts are up and running – I reckon it would take three to five years – the recovery will be far enough along and Japan will have a completely new set of problems," he said.

The move could fall victim to an ingrained cultural aversion to gambling among Japanese leaders stretching back to the 18th century, when authorities had run-ins with bakuto gamblers, the forerunners of the yakuza.

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