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In a move to turn Japan into an Asian gambling destination, the country’s government has approved plans for the first-ever Japan casino in the city of Osaka.
It all began in 2018 when legislation was introduced in the country, allowing casinos to run in ‘integrated resorts’ (IRs). Since then, the establishment of the country’s first casino has been delayed several times. Now, the plan to build a casino is finally gathering steam.
Japan’s cabinet ministers gave their green light to the proposal by local officials for the construction of an integrated resort (IR) with hotels and convention centres in Osaka. The IR is scheduled to open its doors by late 2029.
It will reportedly cost 1.08 tn yen (~$8.1 bn) to build and will be constructed on the man-made island of Yumeshima. Upon its completion, the integrated resort is expected to draw in 20 million visitors on an annual basis. Additionally, the government is also considering a rival bid for IRs in the country’s Nagasaki prefecture.
Japan casino and tourism sector
“The engine that originally fired the move for Japan IRs was broad concern about stagnant economic growth projections since the great recession in the late seventies. Tourism was cited as one of many potential key drivers of economic growth,” said Howard J Klein, Global Gaming and Casinos Industry Specialist who publishes on SmartKarma.
“Officials forecast a goal by 2030 of 60m tourist arrivals up from ~32m in 2019. Of these, 9.6m were from China, up from 2.4m in 2014. The operating forecast is that IR tourism could ignite a growth in China arrivals to 18m,” Klein added.
All in all, the Japanese tourism sector comprised 11.2% of the country’s GDP in 2019. The 9.6 million Chinese visitors who visited Japan in 2019 spent 1.7 tn yen (~$12.5 bn) and made up around 36% of all foreign visitors.
After the onset of the pandemic, these figures dwindled significantly. Only 0.042 million Chinese tourists visited Japan in 2021 and 0.189 million in 2022. The fall in Chinese visitors was a part of the broader trend of declining international tourist visits to the country as Japan recorded 4.12 million visitors in 2020 and 0.25 million tourists in 2021.
Subsequently, the numbers have rebounded, with 3.2 million new tourists in 2022 and 2.97 million tourists in the first two months of 2023. And it is anticipated that the opening of the first Japan casino will help the tourism industry recover even further.
Japan casino and gambling sector
Gambling is a contentious issue in Japan. Although it is expressly forbidden in the country, there are many avenues available for gambling. This includes lotteries, pachinko (Japanese arcade game), and wagering on various sports.
However, the number of Pachinko players has been slowly dwindling over the years. Along with that, attendance at live venues at sports race betting events has also been steadily shrinking since the last decade.
Now, with rapid digitalisation and new innovations in technology, online gambling in Japan is becoming increasingly popular. A study by International Market Analysis Research and Consulting Services Private Limited (IMARC) valued the online gambling market in Japan at $7.2 bn. IMARC expects this market to grow at a CAGR of 6.3% between 2023 and 2028.
“Furthermore, the stringent regulations imposed by the Government of Japan on online gambling activities have also provided numerous benefits, such as generating high revenue in the form of taxes and creating employment opportunities and money for social welfare,” stated IMARC in its report.
This article was first published on April 12, 2023.
