MGM eyes significant growth potential after Japan bill passed

MGM eyes significant growth potential after Japan bill passed

Thursday, December 15, 2016
Japanese government squeezes IR Promotion law through Parliament

MGM Resorts has said that the decision to allow casino gaming in Japan provides the opportunity for ‘significant growth’ as the whole casino industry experienced a fillip with passing of the IP Promotion Bill.

The long awaited bill has been pushed through by Prime Minister Shinzo Abe in order to give the country’s struggling economy a boost, although it has met with some resistance from those who don’t want to see large scale gaming legalised in this way and it was a close run thing whether it got passed in the Diet before Parliament closed for winter.

Although casinos are not expected to open for another six years, casino stocks received a boost on the news that the bill had passed the upper house as analysts CSLA says Japan's casino market could be worth US$40bn a year.

Little wonder then that MGM was among the listed companies moved to make an official statement to the stockmarket on the development. It said: “MGM Resorts offers sincere congratulations to the Diet on its tireless and successful effort in passing the IR Promotion bill, which opens the possibility of large-scale, integrated resort development in Japan. After years of study in the region, we believe the opportunity exists to drive significant growth in sustainable travel and tourism — particularly from international segments — along with the creation of thousands of jobs and long-term economic benefit.

“With an established, full-time development team in Tokyo pursuing discussions in Japan's cultural and business communities, MGM Resorts is well-prepared to pursue future expansion efforts. We have been preparing for this possibility by enhancing our cultural commitment to Japan in the United States via our sponsorship of two world premiere Kabuki events with the famous Shochiku entertainment company and by showcasing established and emerging Japanese artists in the company’s art collections across the country.”

It added that it plans to create a ‘coalition of Japanese business partners’ to defined a vision for a ‘uniquely Japanese’ resort, showing that the company values getting local knowledge into its operations planning and also reassuring the market that local businesses will also benefit rather than just US-based multinationals.

Reminiscent of the last day of Parliament passage of the UK’s Gambling Act in 2005, the Japanese Government left it late to debate the finer points of this law and managed to squeeze the bill through despite considerable resistance from the opposition parties who even instigated votes of no confidence in order to delay its passage, albeit unsuccessfully.

A poll by local media suggesting that 44% of people were against the bill and only 12% in favour. Gambling is a big pastime in Japan though, as the popularity of the country’s pachinko parlours attests, so there is a strong need for better regulation in this area.

Totally Gaming says: Just the potential of large scale casinos on the domestic market is impressive enough, but add in the predilection for gambling of Japan’s near neighbour China and you have a recipe for huge success if you get it right. Analysts Union Gaming said that the heavy focus of this Bill on the Singapore model, where locals as well as international visitors are allowed to gamble should make licences for Integrated Resorts in Tokyo and Osaka ‘the most sought after licenses in the history of gaming’.

The Japan Gaming Congress will take place in Tokyo on 10 – 12 May. To register your interest and to receive further information please visit www.japangamingcongress.com

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