Japan's tourist towns want casinos

Otaru - Ageing and shrinking, Japan's country towns want to gamble away their economic and demographic woes.

With lawmakers planning to submit legislation soon to open Japan to casino gambling, likely in time for the 2020 Olympics, several small cities, hot spring towns and tourist destinations are pushing to get one of the coveted licences.

Japan is one of the world's last untapped gaming markets and, with a wealthy population and proximity to China, could generate $15bn annually from casinos, industry experts say. That would make it the world's second-largest gambling destination after Macau.

The cities of Tokyo and Osaka have so far garnered much of the attention, but even towns like Sasebo, a once-proud shipbuilding centre in southern Japan, and the ageing port city of Otaru to the north, are hoping to set up casinos to draw tourists, generate tax revenues and reverse demographic decline.

"Hot springs, Japanese cuisine, Mt. Fuji and geisha (female entertainers) - these traditional Japanese things alone are not enough," said Kanekiyo Morita, a hotel executive who has proposed a pyramid-shaped casino in Atami, a hot springs town in central Japan.

"Japan's population is rapidly declining and, for tourist towns, getting foreigners to visit is extremely important."

Lawmakers are planning to submit an initial bill aimed at legalising casinos by 6 December  - when the current session of parliament ends - and enact concrete laws in 2015.

The bill is thought to have a decent chance of passing with the business-friendly Liberal Democratic Party in power and Prime Minister Shinzo Abe backing the move.

Operators

The lawmakers have proposed two types of licences - one for large integrated resorts run by global operators featuring convention and entertainment facilities in addition to expansive gambling floors and another for more compact gambling resorts in the countryside.

But they have also recommended that Japan limit the number of licences, prioritising locations promising the biggest economic impact and with the capacity to attract overseas tourists.

"I don't mean to negate Tokyo and Osaka," said Keiichi Kimura, who heads a consultancy and advises local governments and casino operators interested in Japan. "But it's just not right to be focusing the debate on those two places only."

Las Vegas Sands Corp and MGM Resorts International have made it clear that Osaka and the Tokyo region are their primary targets.

"These are the locations you can drive that kind of business tourism into and are known as commercial and financial hubs," George Tanasijevich, president of Las Vegas Sands unit Marina Bay Sands, said after a presentation during which he showed a mock-up for a casino resort on Tokyo Bay.

While lawmakers have not indicated how many locations would be given the right to develop a casino, some politicians involved in the discussions have suggested that one or two licences might be allocated to big cities and one or two to regional economies.

In Sasebo in the Nagasaki prefecture, business and political leaders want to secure one of those spots for a proposed casino alongside the windmills and canals of Huis Ten Bosch, a theme park modelled on a 17th century Dutch town.

The complex, which would include a hotel and entertainment facilities in addition to gaming tables and slot machines, would generate nearly $1bn in annual revenues, the local group estimates, jolting new life into a region that once had a vibrant manufacturing sector but is increasingly reliant on tourism. The plan is to attract tourists from nearby South Korea, China and Taiwan in addition to locals.

Locations

In contrast to the massive resorts of Las Vegas and Singapore, aspiring hosts outside the big cities are looking to the more compact facilities of Europe as a guide.

The German spa town of Baden-Baden, which also has casinos, is serving as a model for casino proponents in two traditional hot springs towns - Atami, in the Shizuoka prefecture and Naruto in southwestern Japan's Tokushima prefecture.

The northernmost island of Hokkaido is shaping up as one of the key casino battlegrounds with three locations - the port towns of Otaru and Tomakomai and Kushiro on the eastern coast - officially putting themselves forward as aspiring hosts.

Hokkaido, which draws tourists seeking a cooler location in the summer and skiers in the winter, has been cited by casino executives as one of the most attractive spots outside Tokyo and Osaka, along with the beaches of Okinawa in the south.