Hokkaido has withdrawn from the stiff race to host one of Japan's first three integrated resorts (IRs), becoming the first prefecture that had previously cited interest to pull out.
Japan's northernmost island and largest prefecture had long earmarked a district in Tomakomai city, located just 20 minutes south of the New Chitose Airport by car, as its ideal site for an IR.
But Mr Naomichi Suzuki who, at 38, is Japan's youngest prefecture leader, vetoed the idea last Friday, saying there was just not enough time to address environmental issues before making the bid.
The governor told the Hokkaido Prefectural Assembly: "While I relished the challenge of bidding for an IR, after careful deliberations, I have judged that it will be impossible to address outstanding environmental concerns before a bid must be submitted."
Environmental activists have expressed concern that construction of the IR will hurt the area's natural ecosystem, including a wildlife sanctuary near Lake Utonai. An environmental impact assessment is likely to take at least three years.
This means Hokkaido will miss the government timeline to submit an official bid between January and July 2021.
Municipalities must demonstrate local political and business support, and include a detailed proposal.
The three IRs - mega-complexes with casinos, hotels, shopping malls, entertainment facilities and exhibition spaces - are set to open around 2025.
Separately, a prefecture survey last week showed that two in three Hokkaido residents were concerned about the IR project.
Mr Suzuki's announcement was met with dismay by Tomakomai Mayor Hirofumi Iwakura and the Hokkaido Economic Federation, though cheered by green groups.
Still, he said that he will not rule out a future bid, given the "immense potential" of an IR that coexists with nature. Japan is restricting IRs to only three sites for a start, but this will be up for review seven years after the first approvals.
Prime Minister Shinzo Abe sees the IRs as key to an economic and tourism windfall despite domestic concerns over gambling addiction.
Japan aims to draw 60 million visitors and boost tourism spending to 15 trillion yen (S$187 billion) by 2030 - up from 31 million visitors and 4.5 trillion yen last year.
Hokkaido's withdrawal leaves seven areas keen on an IR, going by a non-binding government survey in September. They are: Tokyo, Yokohama, Chiba, Nagoya, Osaka, Wakayama and Nagasaki.
Forecasts show that Japan's market could surpass Macau and Las Vegas to become the world's most lucrative casino market.
Mr Brendan Bussmann, director of government affairs at Las Vegas gaming and hospitality consultancy Global Market Advisers, told The Sunday Times that IR operators such as Hard Rock, Melco and Mohegan have already expressed interest in Hokkaido, and that it "will be interesting to see where they go" now that it has withdrawn.
Given Hokkaido's vast size, he wonders if local pressures could have been a reason behind the pull-out, and if this could also lead other cities to think twice.
"If there is still a desire to host an IR in the region, Hokkaido could consider a site closer to existing developed areas like Sapporo, which is a great city that has a lot to offer."