Japanese casinos looked like a US$20 billion jackpot but may turn out to be a bad bet after all

Casino executives who have long salivated over Japan as a potential US$20 billion gaming market are beginning to question whether that jackpot is worth all the trouble.

Three years later, some of that enthusiasm is wearing off. A number of casino executives, who declined to speak publicly because of the sensitive nature of the casino approval process, said the process in Japan has been more difficult compared with other markets that have built gaming industries. At least one company, Caesars Entertainment, has pulled out.

Gaming operators are becoming frustrated by unclear tax and gaming policies, as well as delays that are likely to push the opening of any casino beyond a 2025 target. A lack of interest among local governments and companies, as well as residents’ worries about addiction and crime, is also slowing the process.

While most casino operators are still pursuing Japan resorts, the difficulties are complicating the calculations for the potential costs and eventual payoff associated with a Japanese integrated resort.

“There’s so many different hurdles, it’s really called into question the feasibility of these projects,” said Bloomberg Intelligence analyst David Bonnet. “You have this element where it’s ‘hey we passed this law,’ but no one wants to embrace it, and that’s the biggest issue.”

Caesars gave up on a Japan casino in August, opting instead to focus on its current businesses and a merger with Eldorado Resorts. Others have seen carefully laid plans suddenly upended, as when Hokkaido said last month it wouldn’t pursue a bid in the current round for a licence. The region in northern Japan was considered a front-runner to host a casino, with Hard Rock International actively seeking to establish a resort there.