Japan’s Office of Integrated Resort Regime Promotion – known as the IR Promotion Secretariat – delivered on Tuesday to the Japanese government a report featuring a set of suggestions on how to regulate the country’s nascent casino industry.
The body is made up of professional civil servants advising the government on the IR (Integrated Resorts) Implementation Bill. The report was the result of a series of meetings held by the Secretariat to discuss casino regulation in Japan.
The final document carried little surprise from what had been made public from the Secretariat’s meetings – as reported by GGRAsia. The document should now be used by the Japanese government as a reference while drafting the IR Implementation Bill.
The panel report suggested setting an “upper limit” to the size of casino floors in Japan, but it did not suggest what that limit should be, according to local media reports. Some media outlets had previously mentioned the possibility of casino floors being restricted to 15,000 square-metres (161,459 sq-feet).
The report also suggested limits to the number of integrated resorts allowed to be developed in Japan. The panel did not suggest a figure, but noted that each integrated resort should include only one casino, Japanese media reported.
The document proposed that money collected from a gross gaming revenue tax should be divided equally between the central government and municipalities hosting casino resorts. No percentage level of GGR tax was suggested by the Secretariat.
The Japanese government and the Secretariat have made frequent mention of Singapore as an important reference point regarding casino regulation.
The city-state levies 15 percent gaming tax on mass-market play and 5 percent on VIP play – plus 7 percent Goods and Services Tax in both cases, compared to Macau’s effective tax rate on gross gaming revenue of 39 percent.
Legislation making casino gambling legal in Japan came into effect in December last year. After approval of the enabling bill legalising integrated resorts at the conceptual level, a second piece of legislation – the IR Implementation Bill – has now to be passed, detailing the specifics, including how casinos are administered and regulated.
Under a best-case scenario, the IR Implementation Bill might be passed by the country’s parliament in the 2017 extraordinary session starting in the autumn, according to several investment analysts covering the gaming sector.
Entry fee, limits on locals
The Secretariat report stopped short of an outright ban on locals gambling at any integrated resorts eventually built in Japan. The document however suggested Japan’s citizen number identification system – the “My Number Card” system – to be utilised to monitor visits and frequency of visits to the country’s casinos by Japanese nationals, according to local media reports
The document also proposed capping the number of weekly and the number of monthly casino visits for Japanese nationals, with the maximum number of entries to be decided at a later stage.
Japan should in addition impose on Japanese nationals a statutory entry levy for casino access, the Secretariat said. The report did not propose an amount for the entry fee, but it stated that foreigners should be given free access to gaming venues.
The document also suggested that Japanese nationals be allowed to purchase casino chips with cash only, local media reported. Foreigners would be entitled to use credit cards to purchase chips, and no automated teller machines should be permitted inside casinos.
People under the age of 20 should not be allowed inside casinos, according to the framework report.
The panel of experts also proposed that Japanese integrated resorts should feature the following core elements: a casino; convention space; recreational areas (i.e. shopping malls, museums); facilities promoting domestic tourism in Japan; and hotel accommodation.
Other suggestions by the Secretariat included setting up a casino management committee, to work as an extra ministerial bureau of the government’s cabinet office. The committee should work as a regulator for the sector and – among other things – conduct background checks on casino operators and their executives.
Analyst Grant Govertsen of brokerage Union Gaming Securities Asia Ltd said in a note last month that Japan risked “snatching defeat from the jaws of victory” if it burdened its casino bidding process with too much and too stringent regulation.
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President and chief operating officer of Macau-based casino operator Sands China