Changes In Fiscal Tax Package And Integrated Resorts In Japan

Article by : Helen Dec 23, 2020

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Updated: Aug 10, 2022

There was reported that the government isn’t going to tax the winnings of non-resident gamblers, and this piece of news gives casinos in Japan a boost. The original plan of the Liberal Democratic Party (LDP) was to impose a withholding tax on international gambling tourists. However, the head of the Research Commission on the Tax System, Akira Amari, announced on Thursday that the Party is walking back its plan. The main reason for accepting this decision is the bad situation in the gambling market because of the Covid-19 pandemic. The government hopes to engage more foreign tourists and gamblers, and it might strengthen the economy in the wake of the Tokyo Olympics and Paralympics.

According to Amari, this change will be included in the fiscal tax package for the next year that is going to be compiled by the LDP and its partner Komeito on December 10. It is still premature to congratulate casino operators on this event as far as there were some intentions to scrap the tax last year, but the fiscal 2020 tax plan didn’t see any changes.

The government hopes this move will force operators to create new resorts that combine shopping malls, conference rooms, hotels, and incorporate casinos. There are no complexes of this type in Japan yet, but some cities have expressed their desire to build such resorts.

It would be meaningless if no one comes to the integrated resorts after building them, and it was important that the casinos be on par with international standards.

Las Vegas Sands was eager to build a local complex and allocated $10 billion, but in May they unexpectedly dropped out of the race where they could get the integrated resort license. Tough frameworks for casino operators, such as a 30% tax on revenue, make it impossible for the operator to reach its goals. For this reason, Japan must take measures to promote integrated resorts in the country.

Las Vegas Sands is not the only company that can’t deal with Japan’s frameworks, and Wynn Resorts, Caesars Entertainment, and Genting Singapore have got out of this race as well. Wynn Resorts said that the company is interested in the Japan integrated resort market, but because of pandemic and delays in the application process, it is out of the race. Bill Hornbuckle, CEO of MGM Resorts, is concerned about this deal and isn’t sure the investment is still “prudent.” However, Melco Resorts&Entertainment is interested and hasn’t dropped out of the race yet. Currently, Wakayama Prefecture, Nagasaki Prefecture, Yokohama, the city of Osaka, and Osaka Prefecture indicated an intention to bid.

The things in Japan had been going wrong before the Covid-19 pandemic started, and the main reason for it was a dubious public. The scandal was caused by the news that Japanese politicians were taking bribes from gaming operators. Tsukasa Akimoto, a member of Shinzo Abe’s cabinet, has been arrested and is a suspect in taking $34,000 in bribes from three employees, but the gambling operators weren’t named. Even Shinzo Abe’s resignation in the summer means that things didn’t improve.

The application window for integrated regional resorts has been postponed. Currently, it is delayed, and instead of January 4, the date when the application window was supposed to open, it might be open next autumn. So, it is impossible for communities in Japan to submit an application until October 2021, meaning those operators who are keen on hosting an integrated complex might face new challenges during these months. The government claimed that the postponement is the result of delays in regional government preparations.

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