Japan’s First Casino Aims to Emulate the Success of Singapore

Although it depends on gambling, the Osaka resort has capacity restrictions.

Japan is making a significant wager that an Osaka casino resort will be as successful as comparable establishments in Singapore, but the lofty economic goal is accompanied with the difficulties of running a casino.

On Friday, the same day the government authorized the casino plan, Prime Minister Fumio Kishida said the so-called integrated resort is crucial for Japan’s efforts to develop into a “tourism power house.”

It will help our country grow, according to Kishida.

An integrated resort combines lodging with entertainment centers like theaters, casinos, and convention centers. Japan anticipates that these resorts will boost the economy and create jobs.

On the man-made island Yumeshima, there will be an integrated resort. The target date for opening is the second half of 2029.

A luxurious hotel and an international convention center would be next to the casino. 20 million tourists are expected to visit the resort yearly, bringing in 520 billion yen ($3.8 billion) in revenue.

The resort will be operated by a joint venture named Osaka IR. The business was founded by a group of 20 investors that included MGM Resort International, Orix, Panasonic Holdings, and Daikin Industries.

A well-known executive in Kansai, which covers Osaka and Kyoto, claimed that the 2025 Osaka World Expo and the integrated resort would ultimately turn around the region’s declining fortunes. Kansai is home to both Osaka and Kyoto.

It is anticipated that the Kansai region, which includes Fukui prefecture on the Sea of Japan coast, will experience annual economic gains of 1.1 trillion yen and the creation of 93,000 employment. The annual taxes and other receipts from enterprises are expected to total 106 billion yen in Osaka City and the Prefecture.

Hideyuki Yokoyama, Osaka’s mayor, declared on Friday that “this will be Osaka’s turning point.”

For its model, Osaka turns to Singapore. Theaters, aquariums, and theme parks may be found in the Resorts World Sentosa and the Marina Bay Sands, both of which debuted in 2010.

19 million overseas visitors visited Singapore in 2019, an increase of 60% from a decade earlier. Despite having a tiny geographical area, Singapore managed to establish itself as a popular tourist destination after the integrated resorts began operating.

Osaka wants to construct a resort that will draw tourists from all over the world. The resort will have restaurants and shops selling traditional products from Japan as well as locations where guests may participate in tea ceremonies and learn about flower arranging.

The hotel will have a tourism office that would direct guests to local attractions in the Kansai area.

Creating a workable profits model is one of the difficulties. Osaka expects the casino to produce 80% of the income.

However, governmental laws only permit 3% of the integrated resort to be used for gambling. That would mean that 11,500 people could fit inside.

Over 16 million visitors per year are what Osaka hopes to attract to the casino. The casino would need to be completely crowded with fresh visitors four times a day in order for the math to make sense.

The visitation objectives might be achieved, but there won’t be enough space, according to Sakuta Ohtani, an associate professor at Yasuda Women’s University. With a firm that is so heavily dependent on the casino, sustainable growth will be challenging.

Preventing gambling addiction presents another difficulty. Gambling addiction hasn’t become a major problem in Singapore, where residents must pay a minimum of $150 ($112) a day to enter casinos.

Japanese nationals will only be allowed to visit the casino in Osaka three times per week, or ten times in a 28-day period. Foreign visitors are welcome without charge, while Japanese citizens must pay a door fee of 6,000 yen ($44).

Additionally, Osaka will face competition from other Asian casinos. In addition to Singapore, Macao and South Korea also have integrated resorts. Thailand is also contemplating allowing casinos.

Another obstacle is the objection that locals have to casinos. Due to public opposition, integrated resort ideas were shelved in Yokohama and Sapporo.

Only one other town, Nagasaki Prefecture, had submitted a formal application to host an integrated resort. Plans for a second IR have been put on hold because an approval has been delayed while more information is gathered.

According to a source at the Japan Tourism Agency, although the government of Japan had plans for up to three integrated resorts, it now has no intentions to accept any additional applications.

Integrated resorts as a concept may lose popularity if Osaka is unsuccessful, according to a top official in the Ministry of Land, Infrastructure, Transport, and Tourism.