GGRAsia – Nagasaki IR plan rejected, doubts re financing: Japan govt

Nagasaki IR plan rejected, doubts re financing: Japan govt

Dec 27, 2023 Newsdesk Japan, Latest News, Top of the deck

Japan’s national government officially announced on Wednesday it had decided not to approve Nagasaki prefecture’s development proposal for an integrated resort (IR) with casino. It pointed to doubts regarding the financial capacity of the private-sector promoters linked to the project.

The Japan Tourism Agency – under the country’s Ministry of Land, Infrastructure, Transport and Tourism – made the announcement on Wednesday afternoon (local time).

It said the decision followed a special committee having reviewed the Nagasaki IR proposal. According to the government’s scrutiny, the Nagasaki proposal “did not meet the required standards” set by Japan’s national basic policy on IRs, noted the agency. It added that, “therefore, it is appropriate not to conduct certification” of the plan.

“It is difficult to say that there is sufficient evidence to support the certainty of financing” for the proposed Nagasaki IR, noted the agency. It stated that pledge letters submitted as part of the proposal by potential investors – or letters regarding potential loans – were “not legally binding or similar”.

In addition, the parties linked to the proposal had “changed significantly” since the time of application, mentioned the statement.

The document by the Japanese government said the proposal also did not include “sufficient evidence” that the operators of a Nagasaki IR would invest enough resources in “eliminating” the potential harmful effects in the community of casino gambling.

Another point of concern mentioned by the Japanese authorities related to what they held was a lack of evidence that the parties involved in the Nagasaki IR proposal had sufficient experience and know-how regarding setting up and operating an IR.

Nagasaki submitted its proposal in April 2022, the same time as Osaka prefecture sent in its own bid. Osaka’s plan was approved in April this year by the national authorities.

Nagasaki had mentioned a fundraising target of JPY438.3 billion (US$3.07 billion at current exchange rates) for its scheme, due to be on land at the Huis Ten Bosch theme park (pictured in a file photo), in Sasebo. Casinos Austria International Japan Inc was identified as a commercial partner in the venture.

The prefecture of Nagasaki had said that the “financial arrangers” for the project included Credit Suisse AG, CBRE, and Cantor Fitzgerald Securities Japan Co Ltd. Several commentators on Japan’s casino legalisation process had raised questions about who precisely was behind the investment proposal for the Nagasaki project, their financial experience, and their knowledge of casino operations.