Legalized Gambling Could Be in Japan's Future
Japan is moving closer to legalize gambling in the country, The Wall Street Journal reported on Monday. Lawmakers will submit a bill to legalize gambling within the next few days.
Proponents of the bill believe that legalizing gambling will “provide a strong boost to the government's growth plans.” The bipartisan bill is likely to pass parliament in 2014, with the ultimate objective of having at least one operational casino running before Tokyo hosts the 2020 Summer Olympic Games.
Gambling in Japan is popular, as approximately 30 percent of leisure spending is gambling-related. People currently bet on horse races, bicycle races, motorboat races and lotteries. There is also the popular mechanical game pachinko, where users win tokens that are exchangeable for prizes, but more often than not the users exchange the tokens for cash at a nearby exchange place. These games account for 19 trillion Yen ($185 billion) in wages annually.
As the current Prime Minister Shinzo Abe continues to garner strong approval rates, there is no better time than now to push the bill through legislation. The idea to bring casinos to Japan originated in 2002, but a bill was unable to be pushed through the system as most governments have lasted for no more than a year. The political situation is favorable to new legislation this time around as Abe is expected to remain in power for years.
According to Citigroup (NYSE: C) analyst Anil Daswani, “Japan could generate gross gaming revenue of $13.4 billion to $15 billion, which would make it the second-largest gaming jurisdiction in Asia, after Macau.”
Las Vegas Sands (NYSE: LVS) owns and operates a casino in nearby Singapore. The company views a Japanese addition to its worldwide portfolio as “the biggest opportunity in our industry right now,” according to George Tanasijevich, chief executive of the company's Marina Bay Sands resort.
During Las Vegas Sands' recent conference call, CEO Michael Leven noted that “Japan would obviously be the most expensive investment we've ever made from a single property standpoint. The estimates range anywhere from $6 billion in Tokyo and up.”
Leven also noted that the situation in Japan is “a lot of talk” and “at the end of the day, I don't think anybody is able to really predict it.”
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