Future of Japanese casino bill 'in the balance'

Future of Japanese casino bill 'in the balance'

Tuesday, November 15, 2016 Posted by Scott Longley
Analysts split on hopes for casino bill to be heard

The future of the bill that would see the licensing of casinos in Japan for the first time hangs in the balance after one opposition deputy of the Diet effectively blocked the chances of parliament debating the proposed measure.

According to analysts at Union Gaming, early this week the ruling Liberal Democratic Party (LDP) attempted to get the IR Promotion bill on the official calendar. However, the move was blocked by one member from the minority DPP. This was despite another minority party, Komeito which is also a part of the ruling coalition of Prime Minister Abe, saying it was not opposed to the debate.

Analyst Grant Govertsen said the positon taken by Komeito was good news as there has previously been concern the party would demonstrate some level of opposition to having the debate.

Added Govertsen: “While we would have liked to have seen the IR bill sail through the agenda committee today, we note that it is still very much alive. As with politics the world over, we would expect horse trading to take place behind the scenes over the coming days and (potentially) weeks.

“As we’ve noted before, should the bill be brought up for debate we believe the likelihood of passage remains high given that the LDP has majority control over both legislative chambers,” he added.

Govertsen’s optimism stands in contrast to the view taken late last week by the analyst team at Morgan Stanley which, after speaking to members of the House of Representatives in Japan, suggested the likelihood of the bill passing was “quite low.”

They suggested that time was running out to get the bill debated and passed in the current session, which runs until the end of this month, and despite the possibility of an extended session running into December.

The analysts also suggested, however, that after having passed the Trans Pacific Partnership (TTP) trade deal legislation without consensus last week, the LDP would be unlikely to push for the IR Promotion bill to get the same treatment. Lastly, uncertainty surrounding the future relationship with incoming US President Trump might divert attention away from the bill.

The M Stanley team added: “It is possible to table the Casino IR Introduction Bill again in the next spring session, if it does not pass in this session. However, we believe momentum loss could push the timeline by another two to three years.”

Govertsen at Union similarly suggested the likelihood of an extension of the parliamentary session into December, and suggested this would open the door to the IR Promotion bill being given a hearing.

“In July we had theorized that Japan's IR bill was ‘back from the dead’ and that the likelihood of passage was better than 50/50 given that the LDP party had gained total control of both houses of the legislature,” he said. “We still feel positive and that the LDP is actually trying to insert the IR bill onto the legislative calendar suggests they are willing to expend political capital on the IR bill this year. This is uncharted territory and cause for some amount of optimism.”

Totally Gaming says: As was indicated by the news late last week that Genting Singapore had exited the South Korean market in the hopes of keeping its powder dry for a tilt at running a casino project in Japan, there is keen industry interest in the potential for the Abe government to finally get its IR bill passed. However, the only winners to date are likely consultants to the industry with an intimate knowledge of the ins and outs of Japanese politics.

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