Application process postponed to October
One would have thought that the introduction of Japanese casinos would pick up speed again after the first verdicts in the Tsukasa Akimoto bribery scandal. However, the corona crisis is now causing further delays: the metropolis of Osaka, which has a population of 2.7 million, actually wanted to open a casino resort by November 2027. However, the project is now postponed. To what extent is still completely unclear.
The starting signal for Japan's first casino has not been delayed for the first time: When Prime Minister Shinzo Abe set the course for casino resorts in November 2019 by changing the gambling law, Osaka was actually targeting 2026 for the opening. At the same time, the Japanese government announcedigt that it would also move the application process for international providers from January to July to October.
Corona is hindering interested operators
The Japanese government plans to initially open the casino resorts in three locations. Even with its ambitious plans for the next few years, Japan will have a lot to do to keep up with other countries, for example 70 casinos in United Kingdom. In addition to Osaka, Yokohama, Nagasaki and Wakayama are among the metropolises that have applied for a license. It is currently uncertain whether these cities will experience delays similar to those in Osaka. A meeting of senior officials will be held in Osaka this week to discuss further details.
In a survey launched in November 2020, 89 percent of interested companies stated that their involvement in Japan would be affected by the effects of the pandemicigt. However, two thirds said they would continue to pursue a Japanese license. Some operators, on the other hand, have withdrawn permanently, which was only secondary to the corona crisis.
A key factor was regulatory and strategic differences between the applicants and the Japanese organizers. The French casino and hotel operator local operators withdrew from Japan due to different visions. In advance, Wynn Resorts and also had Las Vegas Sands announced their withdrawal. The latter company stated that it was dissatisfied with the license term of 10 years. The withdrawal came even though Sands had been trying to expand in Japan since 2005.
Mohegan wants license in Nagasaki
One of the providers that continues to show strong interest in a Japan license, alongside Caesars, Melco, MGM and Galaxy, is the indigenous US casino operator Mohegan Gaming & Entertainment. The company has set its sights on the Nagasaki location. In order to increase the chances of obtaining a license, Mohegan recently entered into an agreement with the Japanese company Oshidori International Development GK.
Oshidori is part of the investment company Oshidori International Holdings and was created specifically for the development of Japanese casino resorts. According to Mohegan, the development aims to work with a world-class Japanese company and enter into a dynamic community. Oshidori is the first choice for this, and Nagasaki is also a first-class international travel destination.
Like the other locations, Nagasaki will choose its operator in autumn 2021. Oshidori has already started promoting the new partner. "We are proud to partner with an experienced international casino operator like Mohegan, and the partnership offers groundbreaking development opportunities," said Alex Yemenidjian, President and Chief Executive of Oshidori.
Mario Kontomerkos, CEO of Mohegan, called Japan one of the fastest-growing gaming markets in the world. It is an honor to work with Oshidori - it is an incomparable experience working with the team. The casino resort will benefit the entire region. Japan offers significant development opportunities, and Mohegan's growth strategy also takes into account the cross-marketing opportunities between Japan and Korea. As the operator of ten of the largest casinos in the world, including the Hellinikon Casino in Greece, they want to bring comprehensive expertise to Japan.
Profits for tourists untaxed?
Japan is already considering how the casino resorts could attract international tourists: It is planning (among other things) to exempt casino winnings for foreigners from tax, which should also attract investors. Prime Minister Yoshihide Suga expressed hope for more foreign customers and investors also with regard to the Olympic and Paralympic Games in Tokyo.
It would be pointless if no one came to the casinos after they were built, government sources said. However, the casinos would have to meet international standards. The plan to make casino winnings tax-free for foreigners has already been included in a tax reform package for 2021. However, it is unclear whether the measure is of great relevance in the current situation. The question also remains open as to whether this also applies to profits Online casinos will apply. The developments remain to be seen.
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