GGRAsia – Japan can ease IR rules without statute change: lawyer

Japan can ease IR rules without statute change: lawyer

Jun 13, 2024 Newsdesk Japan, Latest News, Top of the deck

It is feasible that non-gaming infrastructure requirements could be eased if Japan opens a fresh round of applications for integrated resorts (IRs) each incorporating a casino, said Tomohiro Takagi (pictured), a partner at law firm Nishimura & Asahi (Japan), in comments to GGRAsia.

Though he added it would require a decision by the country’s national government, as those conditions were set at administrative level, not as part of Japan’s casino legislation. According to recent commentary by Norifumi Ide, a former senior tourism official in Japan, the IR infrastructure conditions are set at cabinet level.

The national government had taken a “conservative” approach in its first-round screening process for IR applications, suggested Mr Takagi.

Matters related to the minimum scale requirement for an IR’s core non-gaming facilities – such as meetings, incentives, conferences and exhibitions (MICE) space and amount of hotel accommodation – are based on “a [cabinet] order of the government… no Diet [parliamentary] approval is necessary to loosen the requirement,” he outlined.

He was speaking to GGRAsia on the sidelines of the Global Gaming Expo (G2E) Asia casino industry trade show and conference held recently in Macau.

In the first round of applications, where the results were announced last year – after being submitted to the government in April 2022 – only two Japanese local-government applicants, Osaka and Nagasaki, were able to produce plans that met the national government’s infrastructure expectations.

Only Osaka was considered to have a viable scheme and was given permission to build. The current initial investment for MGM Osaka is JPY1.27 trillion (US$8.1 billion).

In May, former official Mr Ide had said the national authorities should launch a second round soon, to develop a Japanese casino sector as a stimulus for inbound tourism. But he also said the current scale requirements for IR facilities were “okay for metropolitan areas but not easy for [other] areas to meet”.

It is not the first time that the idea has been mentioned of scaling down IR facility requirements.

Lawyer Mr Takagi mentioned in comments during a G2E Asia panel, that conditions relating to corporate tax and gaming tax for Japan’s nascent industry, might also have been a factor in the lukewarm response from international investors during the first round of applications.

Under the application framework, local governments must team with private-sector partners. The partners must then be approved, and the public-private setup has to produce an ‘IR District Development Plan’ for central approval. The first round of applications envisaged up to three licences being available.

Mr Takagi affirmed to GGRAsia that according to Japan’s IR Act, the maximum permitted number of IR locations would be reviewed seven years after national government approval of the up to three locations.