Japan is on the cusp of constructing its first integrated casino on Osaka’s artificial Yumeshima island. The ambitious project has been in the works for several years and is set to boost the Japanese economy by creating thousands of jobs and potentially trillions in revenue.
The Japanese government originally passed legislation to allow the construction of integrated resort facilities that would house casinos in 2018. The law was subject to a number of delays before it was put into effect in 2021.
Global casino giant MGM teamed up with the Japanese finance company Orix and won the contract to develop the Yumeshima site. Yumeshima is set to host the 2025 World Expo and the neighbouring area is already popular with tourists thanks to attractions like Universal Studios.
The 49-hectare site is projected to cost approximately 1.8 trillion yen and is expected to be operational by late 2029 or 2030. The complex will contain a shopping mall, museum, hotel, conference centre, casino, and exhibition features and will boast a square footage of around 5.3 million.
The resort will create a significant boost to the Japanese and local economy by creating tens of thousands of jobs during construction and when it is fully operational.
Initial annual revenue targets of JPY 520 billion and the potential to draw approximately 6 million visits from international tourists as well as more than twice that number of domestic visitors will also help neighbouring businesses and attractions.
But what about the resort’s impact on the country’s gambling scene?
Gambling in Japan has traditionally been prohibited under the Penal Code’s Article 185. This has allowed betting on limited markets including the public lottery, basketball and football pools, and betting on four public sports: horse racing, bicycle racing, motorcycle racing, and powerboat racing.
Discussions were held regarding the legalisation of online casinos in line with the IR Development Act. However, online casino operations were not included and remain prohibited.
One of the main reasons online casinos were discussed is because of the popularity of offshore casino operations. While it is illegal for casinos to operate in Japan, there is no legislation in place that stops Japanese citizens from making use of offshore online betting facilities.
These overseas online casinos are based outside of the country and are regulated and monitored by the authorities of their respective countries. Since online casinos are not based in Japan, it is extremely difficult to regulate them under current Japanese gambling laws (source: https://newjapanesecasinos.com/). However, Japanese citizens must be careful when using offshore casinos and using ones fully licensed in their country of origin ensures they are properly regulated by authorities.
When the Osaka integrated resort is up and running, Japanese lawmakers may look at other licenses for similar facilities around the country and may even return to the debate about online gambling, potentially opening up the market for these platforms to become officially licenced in Japan.
As well as generating a significant amount of revenue, with 2023 projections expected to reach approximately US$5.49 billion, the potential new legislation would give the Japanese government greater control of the market and the ability to provide a safe online gambling environment for its citizens.
The introduction of integrated resorts that feature legal casinos in Japan could also impact the Pachinko market. With over 7,000 Pachinko parlours across Japan and over 800 in Osaka alone, many customers could explore other betting avenues.
The number of Pachinko players has been dropping with younger generations more interested in mobile gaming. Integrated resorts are another factor that could impact the popularity of the game despite measures to make it more appealing to women and younger players.
Offshore online betting offers customers greater convenience and a wider selection of betting markets while the integrated resorts will provide customers with a new in-person gambling experience. This should herald a new era of betting in Japan and could be extremely lucrative for operators and local economies.