EDITORIAL: Government must hedge bets on proposed casino resorts

The April 28 deadline for local governments to apply to host a casino-centric Integrated Resort (IR) offers a compelling opportunity for the central government to rethink this misguided initiative based on a fresh and hard look at realities.

Only the Osaka prefectural and municipal governments and the Nagasaki prefectural government have applied for central government approval of IR development plans before the deadline, as two other applicants – Yokohama City and Wakayama Prefecture – have given up.

With international tourism unlikely to recover from the crisis caused by the COVID-19 pandemic anytime soon, online conferences and business negotiations have become the norm. These new realities cast serious doubt on the demand for international convention centers, key components of IR.

When the Wakayama prefectural assembly on April 20 rejected the prefectural governor’s plan to build an IR with a casino in the prefectural capital, even some assembly members of the ruling Liberal Democratic Party, the main supporter of initiative of the RI, voted against the proposal.

Assembly members on both sides expressed skepticism about local government funding plans and estimates of economic benefits.

The government and the ruling LDP-led coalition pushed forward the initiative, a centerpiece of the ruling camp’s growth strategy, using their majorities. But they should now pause to make a calm assessment of what has happened since the idea was first floated.

Local governments that have actually filed applications face many problems and challenges.

The Nagasaki Prefectural Government’s plans to finance the 438.3 billion yen ($3.37 billion) initiative investment for its IR development project involves massive borrowing to guarantee 60% of the amount and raise the rest with private investors.

But the local government kept the names and other details of potential investors secret. She refused a request for disclosure to the prefectural assembly, citing the wishes of the companies concerned.

The vote of the prefectural assembly for the project cannot be qualified as an informed and carefully considered decision. There remains a lot of mistrust and anxiety among the people of the prefecture.

Osaka’s plan to develop an IR on an artificial island in Osaka Bay faces the risk of soil liquefaction.

A group of Japanese and American companies selected to invest in the resort have asked the Osaka municipal government, which owns the land, to take action to resolve the issue. Subsequently, the local government decided to use 79 billion yen of public funds to cover all the costs of measures against liquefaction and soil contamination.

The decision was criticized as violating the administration’s promise that the project would impose no financial burden on citizens.

Osaka and Nagasaki must reveal the details of their IR plans not only to local residents but also to the general Japanese public to fulfill their responsibility to be accountable for their political decisions.

The Department of Lands will review their plans to determine if they are reasonable and viable.

In addition to business issues such as the international competitiveness of the casinos being considered, the review should also address issues from affected taxpayers.

These include the possibility that local residents will be forced to pay the huge construction costs and who will bear the liability if the selected operator pulls out and how.

Japan already has government-controlled gambling and sports betting, such as pachinko, keirin, and horse racing. Some fear that the introduction of casino games will increase the problem of gambling addiction.

Asahi Shimbun’s editorials have repeatedly called for a careful and thorough debate on what regional revitalization should mean and what should be done to achieve this goal.

At a public hearing on the Wakayama IR project held in March by the prefectural government, a speaker said, “What is needed now is the courage to stop and turn around.

This is an excellent message that the government should take seriously.

–Asahi Shimbun, April 29

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