TOKYO – The operators of Singapore’s two integrated resorts (IRs), which this month injected $9 billion in fresh investment, are also itching to place their bets on Japan in the race to enter the world’s largest untapped casino gambling market.

Las Vegas Sands Corp and Genting Singapore, which run Marina Bay Sands and Resorts World Sentosa respectively, are among at least eight suitors for the three IRs that Japan has allowed. Others include Macau’s Melco Resorts & Entertainment and Las Vegas’ MGM Resorts International.

While Japan has not yet decided where to build the IRs, which will likely only open their doors in mid-2020s, casino moguls are going on a charm offensive by setting up local offices, meeting government officials and pledging multi-billion dollars in investments.

Some are pumping in money to sponsor community events and festivals, as others prove they are more than a fair-weather presence by providing disaster aid and relief.

The jockeying comes as Japan, the world’s third-largest economy, is said to hold the keys to a casino market that could be worth up to US$25 billion (S$33.8 billion).

This will make it the world’s second-largest gaming market after Macau, whose casinos raked in US$37.6 billion in gaming revenue last year. Las Vegas’ casinos earned US$11.9 billion while, in 2017, Singapore’s made US$4.6 billion.

Japan’s Prime Minister Shinzo Abe, who visited Singapore’s two IRs in 2014, is looking to the Republic’s playbook as it tries to mitigate the risks of problem gambling while harvesting the economic benefits of tourism spending and job creation.

“The process that Singapore used to establish a structure for and around IRs has been a model around the world,” Mr Brendan Bussman, director of government affairs of Las Vegas gaming and hospitality consultancy Global Market Advisors, told The Sunday Times.

“Japan did not need to reinvent the wheel, but to take the parts of their process that they believe best fits their objectives and adjust as necessary items to meet their own cultural components.”

FIERCE RESISTANCE

The passage of IR-related laws has been acrimonious in Japan, where Diet sessions have triggered opposition boycotts and descended into shouting matches.

The main concern, experts say, stems from the notoriety of the country’s ubiquitous pachinko parlours that raked in an estimated 23.3 trillion yen (S$281 billion) in 2015. Pachinko has long been classified as non-gambling entertainment.

The idea of gambling has long been associated with organised crime and yakuza gangs, Toyo University tourism management expert Kazuaki Sasaki told The Sunday Times. Pachinko parlours, too, have reportedly been used as a conduit to evade sanctions and siphon money to North Korea.

As the spotlight on IRs thus far has squarely been trained on casinos, Dr Sasaki said not many realise that gaming space has been capped at just 3 per cent of the total IR area.

Mr Abe said last month that Japan’s IRs must be of “unprecedentedly large scale and high quality” with hotels with more rooms than any other in the country thus far, and convention halls that can rival the largest in Japan.

Still, in recognition of public anxieties, Japan is restricting IRs to just three sites for a start.

Casino advertising will be limited to the international arrival areas of air and sea terminals to reduce Japanese citizens’ exposure to such ads. Residents must fork an entry levy of 6,000 yen, and will be allowed up to three visits per week, capped at 10 visits per month.

Osaka University of Commerce president Ichiro Tanioka wonders if this will be chump change.

“There is not much impact – 6,000 yen is very cheap,” he said, when compared to Singapore’s $150 casino levy or the entry fees of attractions like Tokyo Disneyland, which charges 7,400 yen.

“The cap of three visits a week will be pointless if the gambler goes to pachinko parlours or bets on horses on the other four days.”

Official figures show 3.2 million people have been addicted to gambling at least once in their lives.

Dr Tanioka, whose university conducts gambling research at its Institute of Amusement Industry Studies, estimates 800,000 are currently addicted to gambling, mostly to pachinko.

Significantly, a law to fight social disorder, including gambling addiction, which passed the Japanese Diet last year, clearly includes pachinko, Mr Hitoshi Ishihara, a partner at law firm Anderson Mori & Tomotsune, told The Sunday Times.

“This is a step in the right direction since it is a fact that pachinko addiction is causing social problems,” Mr Ishihara said.

Japan plans to use facial recognition to bar entry to gambling sites to those on self-exclusion lists, or whose families have asked for their entry to be restricted. Venues will also have to remove ATMs to make it harder for gamblers to place bets on a whim. Some 20 major cities will open rehabilitation and support centres for addicts by next year.

Dr Tanioka suggested that big data can be used in future to track a person’s gambling habits across different forms of bets, so that there could be early intervention for compulsive gamblers who fail to recognise their own addiction.

THE WAY FORWARD

Unlike in Singapore, where the Government decided where to build the two IRs, Japan has taken a bottom-up approach.

“It is up to local governments to decide whether they want to have an IR, and to come up with the concept of what kind of IR they would like to establish so it could rejuvenate the local economy,” said Mr Ishihara. “Subsequently, the local government will have to ask for the national government’s approval for a licence.”

Gaming experts say IRs can provide a major boost to rural areas, as they can create jobs and jumpstart local economies at a time when many areas are facing rapid depopulation. Conversely, there is the argument that maximum economic impact will only be felt if the IRs are built in established cities with other known attractions.

A recent poll of municipalities by Kyodo News showed three sites keen to host the IRs: Osaka, on the reclaimed Yumeshima (Dream Island); Wakayama prefecture, in Marina City on an artificial island; and Nagasaki prefecture, at the Huis Ten Bosch theme park. Yet others who may dip their toes in are Tomakomai in southern Hokkaido, Sendai in the north-east, and Yokohama, just outside Tokyo.

Given that IRs will create jobs that would otherwise not exist in Japan, Dr Tanioka said it will be crucial for Japan to pour more resources into hospitality education and grooming human resources.

One outfit is the Japan Casino School, which opened 15 years ago and has more than 760 graduates thus far, NHK World reported.

Mr Kenjiro Koike, 30, a graduate who used to work as a rickshaw driver in Kamakura, south of Tokyo, enrolled at the school after picking up a customer who worked as a card dealer in Las Vegas.

“If world-class casinos are to be built in Japan, they’ll need good dealers,” he told NHK World, adding that he has a working holiday visa to Canada to gain experience.

“I want to improve my skills before then.”

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