A risky political maneuver sets the stage for the next round of laws to be passed.
That means because the current session of the Diet doesn’t end until Nov. 30, there’s still enough time to pass the necessary legislation to make casino gambling a reality. Although it’s said the public opposes the measure by as much as 2-to-1, the LDP is staunchly in favor of it as an economic boost to the country and its legislative gains will make passage easier.
Betting on a big rollout
Las Vegas Sands (NYSE:LVS), MGM Resorts (NYSE:MGM), and Wynn Resorts (NASDAQ:WYNN) are all angling to obtain one of the very few licenses that will be initially awarded when casino gambling is legalized, as are regional casino operators like Melco Resorts & Entertainment (NASDAQ:MLCO) and Chinese casino magnate Lawrence Ho. Most have said they’d be willing to spend upwards of $10 billion to construct an integrated resort in Japan, a currently untapped market that is estimated to be worth as much as $40 billion or more even than Macau was worth at its peak.
Recently, however, Australia’s Crown Resorts (NASDAQOTH:CWLDY) dropped out of the running, with its director, James Packer, saying it was “unrealistic” for the resort operator to think it could win a license. Crown is more interested these days on the opportunities in Australia for expansion.
Yet it’s been a difficult process for casino gambling to gain traction in Japan. Studies suggest the country has five times the rate of gambling addiction than other countries. While casinos are not permitted, various other forms exist, most notably pachinko, where parlors are numerous.
A long, winding path
It wasn’t until the LDP had secured large legislative majorities that the first enabling laws were able to be passed, but the nuts and bolts and regulatory framework of how casinos would exist and operate still needed to be decided.
Hope started to fade this past summer as legislative impasses mounted and Abe’s popularity began to wane. In something of what could be considered a stroke of luck, bellicose bantering between North Korea and the U.S. allowed Abe to take a strong nationalist stance on protecting itself that caused his popularity to make a U-turn. Seizing the opportunity, Abe called for early elections.
It was a risky strategy because earlier elections in Tokyo sent Abe candidates down to defeat. A similar failure in national elections, or even significant weakening of the LDP’s majority in the Diet, could have doomed the casino bills. It might have served to delay their passage until the next session, which would have given casino gambling critics an opportunity to rally the public against it.
Instead, Abe’s plan seems to have worked and coupled with a number of other stratagems, such as … (read more)