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Japan to See 6 to 12 Months Delay in IR Development Calendar

Article by : Helen Oct 19, 2020

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Due to the Covid-19 global pandemic and other political developments, the Nagasaki Prefectural Government announced to its constituents that the time frame during which local governments typically submit their IR proposals has been pushed back by six months to a year.

An official press release reiterating what central government officials have confirmed to the local media showed that the IR licensing application period will surely be delayed by six months to a year. This interruption is directly related to the fact that a national policy for IR development has not yet been announced, leaving prefectures and potential private partners in the dark over the ground rules for bids and conduct.

In the previous commentary, central authorities communicated that local governments and a few selected private sector partners would be expected to officially apply in the first half of 2021 for the right to have an integrated resort (IR), or host a casino resort, as it is known in other parts of the world.

Three casino resorts were to be permitted nationally in the first phase of liberalization—the Current Corp in Japan, the Japan unit of Casinos Austria International, and Oshidori International Holdings Ltd in Hong-Kong. The companies participated in the prefectures’ request-for-concept process for an IR greenlight and were slated to present their applications to the government between January and July of 2021.

However, the license issuing window will be closed until the latter part of 2021 or until June of 2022, as a result of the coronavirus pandemic, the recent appointment of a new prime minister, as well as the dereliction of the government to reveal the final concept of the IR Basic Plan.

Based on a survey conducted by the prefecture, Nagasaki authorities claim that the majority of the casinos they contacted support their decision to pause its request-for-proposal (RFP) process for hosting a casino resort. The three casinos confirmed that they would take part in Nagasaki’s RFP process and that their plans had not changed.

During a meeting, Nagasaki prefecture also announced their intention of setting up a committee to develop effective strategies to solve the very serious issues associated with gaming, chiefly gambling addiction and all other safety and security issues that would arise from opening a casino in the region.

Despite the delay and following the resignation of Prime Minister Shinzo Abe, the new prime minister, Prime Minister Yoshihide Suga, has been closely involved with Japan’s IR legislation and policy making. He commented publicly that he intends to push the process forward once the stipulated delay period is over.

In late December of 2019, Nagasaki prefecture indicated in a draft that it was looking for an IR investment to a maximum of about JPY550 billion (US$5 billion) and has earmarked land on a circa 76.6-acre land at the Huis Ten Bosch theme park in Sasebo city, but has yet to receive approval by Japan’s central government.

The delay in IR proposals could also be bad news for the second-largest city in Japan, Yokohama. Although the city is a primary contender for an IR, a groundswell of opposition is now trying to boycott their mayor, in the hopes that a new mayor might take the city out of the running. The opposition’s demands have resulted in city council members admitting their distaste of casinos, creating the possibility that the rebels might win.

Nagasaki, on the other hand, does not intend to let the delay thwart their focus. In a meeting, the prefectures addressed the issues the IR might create. Per their plan, they will attempt to address fears over problematic gambling, safety, and security before the anti-casino rebel sentiment spreads.

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