Is casino gambling a safe bet for Japan?

In conjunction with a booming tourism industry, Japan has set its sights on allowing casinos in time for 2020 Olympics.

Some 5 percent of the nation's adult population could be 'addicted to gambling', a recent study says [AFP]

Tokyo, Japan – The “Abenomics” programme of Japanese Prime Minister Shinzo Abe promised to return the country to sustained economic growth with revitalised exports and rising public consumption. While the programme has undoubtedly had some success in terms of putting more cash into the coffers of big business, boosting the stock market, stabilising currency exchange rates, and combatting deflation, there have been few signs that Abenomics’ strategic goals are being met.

The Japanese economy took a startling 6.8 percent plunge in the first quarter of 2014’s fiscal year. Moreover, Japanese workers are earning less money in real terms than before Abe came to power after factoring in rising taxes and energy costs. In that context, it’s difficult to see where the boost in consumer spending is supposed to come from.

But there is at least one industry in Japan that is booming as never before: the tourism industry. Last year, more than 10.3 million people visited the country, and it seems that every month new records are being set. In July, for example, an unprecedented monthly figure of 1.27 million people arrived on these shores.

With tourism quickly emerging as an economic winner for Japan amid so much troubling news in other sectors such as manufacturing and exports, it is not surprising that Shinzo Abe and his team are turning a larger proportion of their attention to this field. It fits in well with the campaign to promote the 2020 Tokyo Summer Olympics, and boosting inbound tourism provokes few political divisions among Japanese policymakers.

There is, however, one major initiative related to tourism being floated that is receiving mixed reviews; it is the notion of creating Japan’s first legalised gambling casinos within a number of “integrated resorts” that would be established around the country.

The Diet Members’ League for the Promotion of International Tourism, a cross-party group of national lawmakers, presented the first bill calling for the establishment of casinos in Japan last December. With Prime Minister Abe’s personal support, the bill now looks headed for passage in the next Diet session.

Mito Kakizawa, policy chief of the opposition Unity Party, a leading member of the league that submitted the bill, told Al-Jazeera: “If we establish casinos within integrated resorts in Japan, it could bring us unusually large revenues. We have seen this from the successful casino operators Las Vegas, Macau, and Singapore. My feeling all along has been, ‘Well, why not?'”

‘Addicted to gambling’

Critics have a ready answer to Kakizawa’s question. Koji Niisato, a former vice-president of the Japan Federation of Bar Associations and a leading opponent of the casino bill, cited the case of pachinko, a wildly popular Japanese mechanical game commonly used as a gambling device.

In today's Japan, due to pachinko, addiction to gambling has already become a serious problem for society.

by - Koji Niisato, former Vice President of the Japan Federation of Bar Associations

“In today’s Japan, due to pachinko, addiction to gambling has already become a serious problem for society. I believe that opening casinos in Japan would make this problem even worse,” Niisato said.

Indeed, according to a recent study sponsored by Japan’s Health Ministry, as much as 4.8 percent of the nation’s adult population could be “addicted to gambling“. That figure is much higher than in other advanced industrial countries – though some analysts believe that this particular survey may be misleading due to its definitions and methodology. The Health Ministry is reportedly pushing for a total ban on use of the casinos by Japanese citizens.

But whatever the concerns, many local governments are open to the idea of establishing integrated resorts, including casinos, within their districts as a measure to boost public revenue.

A leading candidate for the siting of one of these resorts is Tokyo’s Koto city, particularly its waterfront area popularly known as Odaiba. When contacted about the possibility of accepting casinos, Haruyo Fukuda, a local official in charge of development in this zone, said that it was premature to state definitively whether or not casinos would be acceptable there, but that “we will consider it as one possibility to develop the local economy”. She added that the local government still needed to study the potential negative effects of hosting casinos as well, especially since the precise scope and terms of the bill remains undecided.

In Osaka, which forms the heart of Japan’s second great metropolitan area, interest in establishing integrated resorts is keener. Kunio Kano, the executive director of the Osaka Government Tourism Bureau, downplayed, somewhat, the gambling issue in favor of highlighting other aspects of integrated resorts, but he left no doubt that they are quite welcome.

Kano said that integrated resorts would have a “very significant impact” in terms of attracting more visitors to the region, and would provide “the opportunity to build appropriate venues and convention forums that we currently don’t possess”.

He said he envisions ultramodern integrated resorts with activities provided for whole families, and as bases from which visitors could also explore more traditional areas such as nearby Kyoto and Nara.

“Osaka is not focused on the gambling aspect; it is only part of the greater entertainment that will be available”, Kano said.

Political momentum

Some international casino operators such as MGM, Caesars, and Las Vegas Sands, are lining up to explore the possibility of major investments in Japan. MGM, for example, is already scouting potential casino locations in Tokyo.

On the whole, the political momentum seems very much with proponents of the integrated resorts concept. Toru Mihara, professor of Osaka University and Director of its Center for Amusement Industry Studies, estimated that the initial casino bill will pass into law this autumn and that all of the permissions and local government agreements will be in place by the end of 2017. But, he said he does not know if integrated resorts could be built and running by the time of the 2020 Tokyo Summer Olympics when huge numbers of international visitors are expected to flood into Japan over several months.

However, in the long run it may not make that much difference: Professor Mihara estimated that about 80 percent of the patrons to these casinos will be Japanese, not the international visitors.

There is, as yet, no sign that the Abe administration is planning to ramp up efforts to address associated societal problems like gambling addiction in concert with the scheme to open up the nation to the international casino industry, but perhaps such initiatives will appear in the course of the casino debate in the months and years ahead.

For now, all government bets are placed firmly on greater public revenues and increased consumer spending.

Follow Michael Penn on Twitter: @ShingetsuNews