Are Japan’s casino plans doomed to fail?

Several years ago Japan had decided to give permission for several casino resorts in the country. In the beginning there was huge interest from the side of international gambling companies – nearly every large gambling firm was interested in getting a licence. However, till now no fully-fledged casino resort based on the model of Las Vegas has opened in Japan. Were Japan ‘s casino plans doomed to fail from the beginning?

Most recently, around a year ago we had reported that the Casinos Austria AG will soon be able to open a casino resort in Japan. The renowned gambling group from Austria still wants to open a gigantic casino resort in the Japanese city of Nagasaki. However, many of the other interested parties have dropped out. The number of applicants has accordingly become manageable. But why is it that at present there is only one other interested party besides Casinos Austria?

Casino-Resort in Japan: Two applicants for three licences

Up till a few weeks ago there was a huge euphoria among the interested operators. Many international successful gambling companies have shown interest in opening a casino-resort in Japan. However, in the course of time the interest has decreased significantly. Currently there are still two applicants for the three licences available in the country. In August 2020 we had already reported that the French gambling group Partouche had pulled out from Japan.

One of the two parties which are still interested is, as previously mentioned, the Casinos Austria International (CAI). The group is planning to open a pompous casino resort and is allocating around 3.8 billion US-Dollar for it. According to recent media reports, CAI itself will be raising shares of 825 million US-Dollar. The rest of the amount which comes up to around three billion US-Dollar will be provided by investors.

The second applicant is the gambling group MGM Resorts. The group had applied for a licence in the city of Osaka and had agreed beforehand to invest the amount of 15.6 billion US-Dollar in a potential Japanese casino resort. In January of last year, we had reported that MGM Resorts in Las Vegas had dismissed over a hundred employees.

Why have the gambling firms lost interest?

Experts estimate the market potential in Japan at around 40 billion US-Dollar. Thus, it is even more astonishing that many other gambling companies as Caesars Entertainment and Las Vegas Sands Corp. have gone back from their intention to open a casino resort in Japan. At the beginning of the negotiations with the gambling companies the Japanese government had tried to make an investment in the country look as attractive as possible.

However, by time it soon became clear that the development costs for the casino areas would be much higher than previously thought. Besides this, the potential interested parties were informed that even the taxes and expenses would also be significantly higher than originally planned. Over the years more and more companies dropped out of the application process, so that at the end only Casinos Austria International (CAI) and MGM Resorts have remained. Thus no one will have to fight to get permission: there are only two applicants for the originally planned three licences in Japan.

Conclusion

Till now it is still not clear whether the two remaining applicants MGM Resorts and Casinos Austria will ever turn their plans for a casino resort to reality. Although Japan has for some years been striving to make the investment in a casino resort in the country attractive to gambling groups, the interest is comparatively low. One can therefore conclude that Japan’s casino plans were doomed to fail from the start.

Image Source: https://pixabay.com/de/photos/japan-straße-nacht-osaka-asien-2014618/