GGRAsia – 70 pct chance for Japan IR bill this session CIMB told

70 pct chance for Japan IR bill this session CIMB told

Jun 26, 2015 Newsdesk Japan, Latest News, Top of the deck

The Integrated Resort Bill that aims to legalise casino gaming in Japan has a “70 percent chance” of passing during the newly extended session of the country’s parliament (pictured), analysts at CIMB Securities Ltd have been told in a meeting with a lawmaker there. They did not name the person that gave them the information.

“We met with a member of the House of Representatives of the Japanese National Diet in order to get clarity on the progress of the Promotional IR (integrated resort) bill in Japan,” said analysts Michael Ting and Jensen Poon in a note on Thursday.

“We were told that the Promotional IR bill has a 70 percent chance of passing by the end of the current Diet session on September 27.”

But the pair added: “Given the delays in the past, we will not be surprised if the passing of the Promotional IR bill gets further delayed until next year’s Diet session. Given the expected lengthy discussion period for the follow-on Implementation IR bill, tender and construction processes, our early best-case scenario is for the Japanese casinos to begin operations well after the 2020 Japan Olympics, possibly 2022,” they added.

On Wednesday the main Diet session of the year concluded. But the sitting of parliament was extended for a further three months to September 27 – in what is known as an Extraordinary Session – in order to pass legislation considered urgent by the government of Prime Minister Shinzo Abe.

“The Diet session will be extended for three months and hence the IR bill may be possibly discussed during that timeframe. However, a detailed schedule of the IR bill discussion has not been established yet as security-related bills need to be discussed first. As the IR bill is submitted by cabinet committees, there are currently two other non-gaming related bills that need to be discussed prior to the IR bill,” stated CIMB.

Positive for S. Korea

The brokerage sees further delays to Japan’s casino legislation as a positive for South Korea’s 16 foreigners-only casinos. Those venues count Japanese players as prime customers – second only to tourists from mainland China.

Even if Japan’s initial IR bill does pass, there are likely to be a number of years of negotiations. CIMB notes the Diet has one year to establish the second piece of enabling legislation, which it refers to as the “IR Implementation Bill”, which would detail the framework of the casino industry, such as regulations, tax and bidding processes. After these two bills are passed, a bidding process for locations and operators would begin, to be followed by the construction process, said CIMB.

On Tuesday Japanese pachinko hall operator Dynam Japan Holdings Co Ltd said in a Hong Kong filing it is to enter the “resort development business” in Japan. The filing didn’t mention a casino or the size of the proposed investment, but Dynam has said in earlier filings that it aspires to run casinos.

The firm added that a target site for development was land that has been used as a training institute by Dynam in Shimonoseki, the largest city of Yamaguchi prefecture on the island of Honshu in Japan. Sources in Japan pointed out to GGRAsia that the prefecture is also the power base of Mr Abe, but the prefecture is not thought to be a leading candidate for either the first casino resort or the first tranche of casino resorts.