Gambling in Japan is difficult if you are a resident. The Diet is not above allowing gambling; however, they have restricted how often residents can go to casinos per week and month. The details are still being decided, and more news is showing Japan revenue is stymied by specific decisions.
Fitch Ratings, an international credit watcher, believes revenue growth in Japan will be $6 billion, now that the Diet has passed the resident bill addendum. The bill will allow casinos to operate in the country, including Genting. However, by limiting how often residents of Japan can visit and spend money in the integrated casinos, the revenue will be hindered. At first, Fitch thought the casinos would make $10 billion annually. Now they feel that the income will be $4 billion less.
The credit watcher changed their decision after the Japan Integrated Resorts Bill went through the Liberal Democratic Party and the Komeito coalition Friday, April 27, 2018.
The IR bill has a limit on casino floor space. There is also going to be a 30% tax on casino revenue. With an entry fee for residents of Japan set at $55, and a cap of three casinos throughout Japan—things are tough.
Government Requirements Set Limits
The Japanese government is not only setting high percentages on taxes and limits on residents, but they have also decided to do thorough background checks on the operators they will allow to build integrated casinos.
Japan does not want organized crime groups to get a hold in the casino industry. If a casino official is found guilty of securing a license through fraud, they will face up to five years in prison and be fined 5 million yen. It is a hefty price that is meant to stop any official from being bribed to allow licenses to go to Japanese Yakuza or other organized crime casino operators.
Taking the new bill into consideration, Fitch believes $3 billion in gaming revenue for one metropolitan area will be earned. If there are two remote resorts, then the income will be around $1.4 billion each, which puts the estimated earnings at $6 instead of $10 billion.
There is a potential for the Diet to allow more than three casinos, but it will take time. Revenue earnings will need to show it is worth letting gambling, while addiction will need to be at a minimum to ensure the restrictions on residents are not tightened.