Japan's Osaka rolls the dice on being Integrated Resort destination

City sets out to woo developers even as Japan govt looks to ease fears of gambling problems

The reclaimed Yumeshima Island in Osaka Bay is being mooted as a possible site for an integrated resort by the Japanese city.
The reclaimed Yumeshima Island in Osaka Bay is being mooted as a possible site for an integrated resort by the Japanese city.PHOTO: BLOOMBERG

Osaka, the less glitzy cousin of Tokyo, is pulling out all the stops to put itself at the forefront of Japan's move to roll out integrated resorts (IRs), even as the national government mulls over ways to ease concerns about social ills.

Osaka, which is vying with Paris to host the 2025 World Exposition, last month set up a city bureau to woo prospective developers and formulate policies.

Prospective IRs could be housed on the man-made Yumeshima Island in Osaka Bay, about 5km from Universal Studios Japan, a location supported by the city's leaders.

A White Paper last week on Japan's IR potential by Las Vegas gaming and hospitality consultancy Global Market Advisors (GMA) said IRs on an "Osaka Strip" could add US$10.9 billion (S$15.4 billion) in annual gaming revenue to the city's coffers by 2025.

"Three or more operators would create critical mass and a more dynamic tourist destination, allowing the Osaka Strip to compete with destinations such as Las Vegas, Macau and Singapore," it said.

Although Japan had passed laws to allow IRs in a heated Diet session last December, it still needs to table an implementation law that details the nuts and bolts of how to minimise problem gambling.

On Wednesday, a government panel of experts proposed that IRs be required to have a convention centre, a recreation facility such as a shopping mall and a museum, a facility for domestic travel as well as a hotel, on top of a casino.

Prime Minister Shinzo Abe, who wants Diet debate on this to start by this year, last month set up a national task force said to be keen on laws modelled after Singapore's, including casino entry levies.

Japan is seen as the holy grail of high-stakes gambling. Chief executive Lawrence Ho of the Macau- based Melco Crown Entertainment has said it will "spend whatever it takes to win" the right to launch an IR in Osaka. And Las Vegas Sands chief Sheldon Adelson, whose group runs Singapore's Marina Bay Sands, said the company will invest US$10 billion in a Japan IR outfit.

GMA expects Japan to allow IRs in areas such as Tokyo, Yokohama and Hokkaido, through which its gaming revenue could hit US$24.2 billion (S$34 billion) annually. This dwarfs the US$4 billion in gaming revenue that Singapore's two IRs generate on average each year.

Before this, pachinko parlours were the big thing. They brought in US$34 billion last year, from more than 658,610 slot machines. The parlours offer prizes to players who exchange them for cash at a third venue, but operate in a grey area as gambling is controlled in Japan.

Japan's IRs will likely be a threat to Singapore's, GMA notes. While Singapore has first-mover advantage, Japan's location and appeal will make it a bigger draw for its North-east Asian neighbours. As visa rules are gradually eased for Chinese visitors, their numbers have soared - from 1.3 million in 2013 to 6.4 million last year.

Japan is targeting 40 million visitors by 2020, when Tokyo hosts the Olympic and Paralympic Games. Last year, it hosted a record 24 million visitors - thrice that in 2012.

The country is looking to IRs to boost its appeal beyond the Games, and hopes to draw 60 million foreign tourists yearly by 2030.

Dr Ichiro Tanioka, president of the Osaka University of Commerce, Japan's first graduate school to offer courses in IR management, said IRs will form the basis of the country's push to become a Mice (meetings, incentive travel, conventions and exhibitions) hub. What Japan needs to do, he said, is to convince the public that casinos are a small part of a suite of entertainment options including shopping.

A version of this article appeared in the print edition of The Straits Times on May 12, 2017, with the headline 'Osaka rolls the dice on being IR destination'. Subscribe