Investment bank Morgan Stanley says it thinks the possibility of Japan’s lawmakers passing a bill this year to legalise casino gaming in that country as “quite low”.
Local and international media had reported that Japan’s Diet (pictured), or parliament, might debate casino legislation in the lower house during the current extraordinary session, which is due to run until November 30.
In Monday’s note, Morgan Stanley said it anticipates that the enabling bill legalising casino resorts at the conceptual level “may not pass” in the current session, despite the governing Liberal Democratic Party (LDP) of Prime Minister Shinzo Abe holding a majority in both houses of the legislature.
“First, the current session which ends in end-November does not leave much time for it to pass in both houses, although it is possible that the session may be extended for two to three weeks in December.
“Second, after [the] LDP pushed through the TPP [Trans-Pacific Partnership free trade agreement] without consensus, it is unlikely to do this with the casino IR [integrated resorts] … bill. Finally, uncertainty following the U.S. Presidential election could divert attention away from the bill,” said the Morgan Stanley team.
The Diet’s lower house passed the TPP agreement last week with support of the governing coalition formed by the LDP and a Buddhist-influenced party called Komeito, but most of the opposition boycotted the TPP vote.
Japan last considered a version of the first-stage casino enabling legislation in 2015. The country’s lawmakers failed to proceed on the matter, amid other political distractions and some domestic opposition. After an enabling bill legalising casino resorts at the conceptual level, a second piece of legislation would needed to be passed to detail the specifics, including how they are administered and regulated.
Following meetings in Japan with members of the lower house – the House of Representatives – Morgan Stanley said in its Monday note that it believes “80 percent of the ruling LDP party favours” the Integrated Resorts Promotion Bill.
“However, the DPJ [Democratic Party of Japan] and… Komeito… are not fully behind it. After the TPP was passed in the lower house without consensus approval, we believe it may be difficult to table this [casino] proposal without prior discussion with all parties, which may take more time,” said the investment bank’s analysts.
Several international casino operators have expressed interest in participating in a bidding process for a casino licence in Japan if casino gambling is legalised there. Sheldon Adelson, chairman and chief executive of casino operator Las Vegas Sands Corp, on November 3 reiterated the firm’s interest in being involved in such a project for a major Japanese city.
James Murren, chief executive of Las Vegas-based MGM Resorts International, said earlier this month that the company was willing to invest up to US$9.5 billion in a casino scheme in Japan.
On Friday, Genting Singapore Plc announced it was selling its participation rights in a casino project in South Korea’s southern holiday island of Jeju, as it eyes the Japanese market. The casino operator said it was “optimistic” that the casino enabling bill in Japan would “be enacted in the near future”.
“When this happens, significant resources will need to be devoted to position the group as a strong candidate for the bidding process,” the firm said.
Morgan Stanley said in its Monday note that it estimates the casino market revenue in Japan to be “in the range of US$7 billion to US$20 billion”.
The institution further stated that if casino gaming were legalised, it expects Japanese authorities to impose entry fees for locals. “Similar to Singapore … there will be an entry fee for locals to deter them from excessive gambling, but the amount is uncertain for now,” stated the institution.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors