GGRAsia – IRs could push Japan GDP up at least 1pct: lawmaker

IRs could push Japan GDP up at least 1pct: lawmaker

Oct 31, 2019 Newsdesk Japan, Latest News, Top of the deck

Japan’s nascent casino industry has the potential to spur at least 1-percent growth in the country’s gross domestic product (GDP). That is according to Takeshi Iwaya, secretary-general of a multi-party committee in Japan’s House of Representatives promoting the introduction to the country of casino resorts – known in Japan as integrated resorts or “IRs”.

“It’s still too early to say what economic benefits integrated resorts will generate, but I am personally hopeful they will eventually push up Japan’s GDP by 1 percent or more, not just by hosting a slew of international conferences but by increasing the number of tourists from abroad,” Mr Iwaya said in an opinion piece on Wednesday in the English-language media outlet Japan Times.

He added: “I also believe they will greatly contribute to the Japanese government’s target of attracting an annual 60 million foreign tourists by 2030.”

Japan’s central authorities will allow a maximum of three casino resorts in the first phase of market liberalisation, with the first property unlikely to open before 2025, according to several investment analysts. In September, Fitch Ratings Inc, a credit rating agency, said in a report on the outlook for Japan’s newly-liberalising casino market that it expected annual gross gaming revenue per resort – wherever located – to exceed by a “rough estimate” US$10 billion.

“Japan needs the resorts because it’s a tool essential to the nation’s goal of establishing itself as a ‘tourism-oriented’ country,” Mr Iwaya stressed in his opinion piece.

He added: “The casino law stipulates that envisioned integrated resorts be equipped with not just casinos but other facilities, including hotels, recreational areas and convention halls. This is critical for Japan, as the nation is fast lagging behind its rivals overseas in luring international conferences and exhibitions, partly due to a lack of spacious venues that can host large-scale events.”

The lawmaker pointed out that casinos were needed because such facilities were an important contributor to the overall financial performance of any integrated resort in Japan. “The unfortunate reality is that it will be very difficult for such venues to be commercially successful without casinos.”

He added: “Skeptics are of the opinion that Japan’s casino debut is less about invigorating local economies than it is about opening up the nation’s potentially lucrative market to foreign casino giants such as Las Vegas Sands Corp. But 30 percent of gaming revenue by these operators will be contributed to national and municipal coffers in Japan so they can be used to stimulate regional economies.”

Mr Iwaya also said that “some Japanese” had misconceptions about the modern casino industry, wrongfully “conjuring up the image of shady gambling parlours.”

He additionally discussed concerns that the legalisation of casinos could lead to serious problem gambling issues among Japan’s population or to a rise in criminality. Mr Iwaya noted that the Japanese authorities were already taking several steps to tackle the matter, including the passage of specific legislation on problem gambling prevention, and adoption of an entry levy in order for locals to be allowed to enter casinos in Japan.

Also on Wednesday, the Japan Times carried a separate opinion piece by Keiko Itokazu, a former House of Councillors member and a prominent opponent of casino legalisation in Japan.

“I oppose the Japanese government’s efforts to use casinos as a way to boost the economy, simply because casinos will worsen the gambling addiction problem in this country and ultimately destroy communities around the facilities,” she stated.

Ms Itokazu added: “Casinos could worsen public safety… Casinos could also become a scene for gang conflict, undermining the safety of workers and customers.”

The former House of Councillors member stated it was “debatable” whether ordinary Japanese citizens would benefit economically from the opening of integrated resorts. “Casino owners, presumably non-Japanese, could glean the money out of people to make a profit and it’s unlikely there will be a positive trickle-down effect for the regional economy,” she said.