Japan: The next domino?
Japan’s ruling Liberal Democratic Party plans to propose casino legislation, according to a report from Jiji Press.
In June 2007, Seiko Noda, who led an LDP study group that was drafting casino legislation, said the goal was to pass a bill by the end of the ordinary Diet session in June 2008.
The bill is expected to call for the establishment of an independent watchdog agency with strong investigative authority. Inspectors from the authority would be charged with examining casino license applications, conducting employee background checks and onsite inspections, certifying casino equipment, and other typical oversight functions.
Funding for the authority would come from the casino operators themselves and not from the general treasury.
The proposal to open Japan to casino operations began as part of a broader plan to attract more foreign visitors, according to Noda. The government wants to boost annual foreign visitor numbers. In 2006 foreign visitors totaled 7.3 million. The government wants to increase that number to 10 million by 2010.
More money for the treasury is another attraction. Said Noda last June, “If there were three Las Vegas-style casinos in Japan, it could bring in 700 billion yen in tax revenues. At the same time, there would be investment, and employment would increase.”
One area where the casino issue is receiving mixed reviews is the prefecture of Okinawa, according to Japan Update.
In December, the LDP chairman of general affairs, Toshihiro Nikai, led an economic conference on Okinawa’s situation and promoted casinos as a way to boost the local economy. Meanwhile, Keiko Itokazu, a member of a small opposition party, the Social Democratic Party, who holds a seat on the House of Councilors in Okinawa, was attending the “Casino Matter Symposium 2007 Executive Committee” conference at Tiruru Center in Naha City. The symposium addressed concerns by women about possible problems casinos on Okinawa might bring to the community.
Responding to a presentation on Macau, Itokazu said, “Macau is usually very safe, and security maintained in keeping the peace.” But she added, “It will cost a lot to keep peace in Okinawa because police would have to work harder, and a lot more policemen would be needed to protect the country.” She believes that the added cost for adequate “protection” will negate any economic benefits from casinos.
Kazuo Okada, chairman of the Japan-based Aruze Corp., a major slot manufacturer, as well as vice chairman of Wynn Resorts, believes legalized casinos in Japan are inevitable.
“The important thing now is to get someone who will lead the effort,” he says. “If we get such a leader it will move forward faster. There are so many Asian countries now getting into the gaming industry, it won’t be long until the Japanese government becomes obliged to offer casino gaming. We think it will take a three- to five-year term to be realized.”
The LDP panel hopes to submit its bill as soon as it has drawn up specific regulations. To pass the bill will require the support of coalition partner New Komeito and the main opposition Democratic Party of Japan, the Jiji Press report said.
SJM goes public
Sociedade de Jogos de Macau has begun its $1 billion initial public offering. Shares were to be offered to institutional investors beginning January 15 and to the public on January 21. Eighty-five percent of shares were sold to institutional investors, 5 percent to employees and 10 percent to the public. Trading on the Hong Kong exchange will begin February 1, according to media reports.
The operator of almost two-thirds of Macau’s existing casinos, with some 37 percent of the market, SJM is 80 percent owned by Sociedade de Turismo e Diversoes de Macau, founded by Stanley Ho. Ho held the monopoly on gaming in Macau for 40 years, until 2002, after the former Portuguese colony had returned to Chinese rule.
SJM will raise the $1 billion from the sale of 25 percent of its enlarged share capital, according to Dow Jones Newswires. All shares will be new shares. Deutsche Bank will serve as manager for the offering.
Resorts World Bhd, one of five companies that comprise the Genting group, is offering to sell its entire stake in Genting International Plc, another Group company, to Resorts World shareholders.
Resorts World counts the Genting Highlands Resort among its leisure and hospitality businesses that include gaming, hotels, seaside resorts, theme parks and entertainment.
Genting International acquired Stanley Casinos in the U.K. in 2006 and is developing the second integrated casino resort on Sentosa Island, Singapore. In December, via subsidiary Palomino Limited, Genting took a 10 percent stake in U.K. gaming operator Rank. Another subsidiary, Genting Stanley Alderney Limited, is applying to Alderney for an online gaming license.
Resorts World currently holds over 593.7 million ordinary shares of Genting International, representing 6.16 percent of equity of that company. The offer price has not yet been determined.
Proceeds from the proposed sale will be used as needed for working capital, investments, acquisitions, and repayment of debt.