Is relying on gambling revenue for regional development appropriate?

Editorial

13:04 JST, May 4, 2022

The situation has greatly changed from the time the plan was put forward, for such reasons as a drastic decrease in the number of visitors coming to Japan due to the novel coronavirus pandemic. The central and local governments need to reconsider once again whether they really should realize the plan.

Regarding the projects to build integrated resorts featuring casinos, the Osaka and Nagasaki prefectural governments have submitted business plans to the central government to announce their candidacies for the projects. Both aim to start operation of the resorts in the latter half of the 2020s. The central government later intends to decide on the areas to be certified through a screening process.

An integrated resort is a complex integrating facilities such as a casino, an international conference hall and a hotel. Gambling as prohibited by the Penal Code will be permitted in the resort, allowing casinos to operate. The private sector will be responsible for the operation of casinos, and a portion of the revenue will be paid to the central and local governments.

The central government aims to increase the number of foreign visitors to Japan to 60 million in 2030, positioning integrated resort projects as the key to achieving the goal. Local governments hoping to attract the projects also apparently have high hopes that the projects will be a catalyst for vitalizing local economies.

The Osaka prefectural government aims to start the operation of an integrated resort on the artificial island of Yumeshima — the site of the Expo 2025 Osaka, Kansai — and estimates that the annual economic effect on the Kinki region will exceed ¥1 trillion. The Nagasaki prefectural government plans to install an integrated resort within Huis Ten Bosch, a large-scale resort facility in the prefecture, and expects to attract more than 6 million visitors a year.

However, will the projects go as smoothly as they expect? After the enactment of the integrated resort promotion law in 2018, a Diet member who was state minister for integrated resorts at the Cabinet Office was arrested on corruption charges, slowing the momentum to attract these projects.

The coronavirus pandemic has also added negative influences on this trend. At one point, as many as eight local governments were willing to host the projects, but many of them abandoned the idea mainly due to the withdrawal of operators. As online casinos are also growing in popularity, there is no guarantee that physical casinos will be able to attract visitors from overseas in the future.

The Osaka prefectural government and the Osaka municipal government estimate they will each receive more than ¥50 billion a year from casino revenue and admission fees. However, it is not certain that the number of visitors to Japan will recover smoothly, so it must be said that their expectations are overblown.

There are also deep-rooted concerns among residents that gambling addiction will rise and public security will deteriorate.

In the first place, is it an appropriate growth strategy to use the money visitors lose at casinos for the purpose of regional development? While the central and local governments have said they will take measures to curb gambling addiction, they pin high hopes on the revenue from casinos. Such a stance is contradictory.

The central government had the initial plan to set a maximum of three locations for certification of the integrated resorts and have them compete with each other, but the intention has already failed. Rather than promoting the projects based on the premise they will be realized, it is time for the central and local governments to reexamine the necessity of integrated resort projects.

(From The Yomiuri Shimbun, May 4, 2022)