Nagasaki’s IR Growth Plans Depend on Local Traffic, Not Foreign Tourism

One of the main reasons Japan has been trying for more than two decades to bring integrated resorts (IR) and casino gambling to the country is to promote international tourism. The tourism industry always means big money for any country that manages it properly, and Japan’s government finally convinced enough people that introducing IRs was a good idea for boosting international traffic. As Nagasaki starts to make its final preparations on a plan to present to the government, in an effort to win one of three potential licenses that could be issued as early as next year, the prefecture is laying out some of the details. While international traffic will play a role in the IR’s development, Nagasaki only expects to play a small part.

Local Traffic to Drive Nagasaki’s Success

According to local media reports, foreigners won’t drive the growth of a Nagasaki IR. Instead, the domestic tourism market is expected to comprise a huge portion of the resort’s success. As much as 70% of the traffic visiting the resort would be domestic, according to prefecture officials. That might be a difficult goal to reach, especially given some of the restrictions that Japan’s national government wants to put in place.

In order to find enough support for the IR regime, the industry will have to closely watch how often Japanese citizens visit any of the properties that open. They won’t be able to hit the casino floors more than three times a week for a maximum of ten in a 28-day period. In addition, they will have to pay $54 (JPY6,000) each time they want to make the trip.

That may deter some of the would-be visitors, but not the dedicated gamblers looking for some action. Nagasaki has a population of roughly 1.31 million. Assuming 10% visit a casino, at $54 each time, the government stands to earn over $7 million each time that collective 131,400 make the trip. That doesn’t include any visitation by citizens from other parts of the country. Japan hasn’t revealed where that money, or any of the same payments received at the other IRs, will be spent.

Nagasaki Plan Coming Together

After a contentious final lap, Casinos Austria was chosen as Nagasaki’s IR partner. It is teaming up with Hyatt Hotels and several local businesses to develop the massive resort, which so far includes a gaming floor spanning more than 100,000 square feet, eight hotels and commercial and meeting spaces. There is still the possibility that the project may not move forward, as Japan isn’t obligated to approve three locations in the initial phase. It could just as easily decide to reject all proposals, but that isn’t likely.

Nagasaki still has to convince Japan that it managed its IR competition fairly. It has repeatedly said that there weren’t any underhanded dealings that led to Casinos Austria being selected, but some aren’t convinced. Oshidori International, one of the final contenders, is contesting the results and wants Nagasaki’s IR division to meet it at the table. It is requesting the prefecture produce documents and other material related to the IR development, according to Inside Asian Gaming.