GGRAsia – Osaka restates anti-graft rules as casinos come courting

Osaka restates anti-graft rules as casinos come courting

Aug 21, 2018 Newsdesk Japan, Latest News, Top of the deck

The government in the Japanese city of Osaka has reiterated a ban on public officials going alone to meet casino company representatives, reports Reuters news agency.

The authorities have additionally restated a prohibition on officials attending parties, sharing meals or receiving gifts, stated the news outlet.

Reuters said “at least” eight casino firms are courting Osaka as a site for a casino resort, and reported some have been making charity donations to public causes, an activity seemingly permitted under the rules.

United States-based groups MGM Resorts International and Las Vegas Sands Corp, as well as Hong Kong-based Melco Resorts and Entertainment Ltd, have all indicated they expect a Japan project to cost at least US$10 billion.

Japan legalised casino business with the passage in July of the Integrated Resorts Implementation Bill.

In Osaka, the government has identified casino business as a way to boost the local economy via taxation, job and infrastructure creation and increased inbound tourism. Such a venue would probably be located on an artificial island called Yumeshima (pictured), or “Dream Island” in English.

“I want to properly nurture the tourism industry in Osaka as one of its pillars,” said Ichiro Matsui, Osaka’s governor, as quoted by Reuters.

Executives from 11 casino companies met Mr Matsui for “courtesy calls” 25 times between 2012 and May 2018, reported Reuters, citing prefectural records.

The news outlet added that operators and “other related companies” had met Osaka officials 119 times since May 2017.

An Osaka casino would need to generate US$4 billion a year in order to produce a 14-percent annual return on a US$8-billion investment, banking group Morgan Stanley suggested in a July report, mentioning some concerns about how much regulation and red tape might be imposed on the industry at national and local level.

The central government has indicated there will be a 30-percent levy on gross gaming revenue (GGR) produced by the industry – compared to Macau’s effective rate of circa 39 percent – although how and whether Japan’s GGR tax will be divvied up between the national authorities and the regions is yet to be announced.

Reuters reported that public opinion in Osaka is divided on the casino topic. It cited a March survey by Japan’s public broadcaster NHK that indicated 42 percent of residents that responded were opposed to a casino because of fears about gambling addiction among locals. Fewer than a fifth of respondents were said to be in favour of such an initiative.

The local government has suggested such a project could help create more than 80,000 jobs “a year” across the region, reported Reuters.

But the news agency quoted Teruo Sakurada, a professor at Osaka’s Hannan University and who leads an anti-casino group, as suggesting many jobs were likely be part-time and with low pay relative to average local rates.