Japan’s cabinet has confirmed the resumption of its integrated resort (IR) licence application process, scheduled to begin on May 7, 2027. This follows the first round of bidding, which concluded in 2023 without awarding all available licences. Local governments will have six months to apply for the two remaining licences initially authorised under Japan’s Integrated Resort Implementation Law of 2018. This legislation paved the way for up to three IRs, allowing casino operations within these complexes, as part of a strategy to boost foreign investment and tourism.
The initial legislative push for integrated resorts was spearheaded by former Prime Minister Shinzo Abe, aiming to position Japan as a competitive player in the global gaming and tourism markets. Current Prime Minister Sanae Takaichi continues to support this vision, as evidenced by her directive to Tourism Minister Yasushi Kaneko to advance IR development and enrich Japan’s tourism offerings following her election in October.
Since the legalisation of IRs, market analysts have made varied projections about the potential revenues. Initial estimates suggested the market could generate up to $40 billion annually, outpacing Macau’s $30.9 billion in gross gaming revenue last year. However, more conservative forecasts place annual revenues at $19 billion from gaming and $6 billion from non-gaming activities. Global interest was significant, with major players such as Wynn Resorts, Caesars Entertainment, Genting Group, and Melco Resorts expressing interest. The late Sheldon Adelson of Las Vegas Sands Corp notably committed substantial investments to secure a foothold in Japan.
Despite the initial enthusiasm, public opposition, stringent regulations, and the COVID-19 pandemic stalled progress. Consequently, only two prefectures, Osaka and Nagasaki, submitted bids initially, with only Osaka’s proposal, a $10 billion project by MGM Resorts International and Orix Corp, receiving approval. This project, slated to open in 2030, is projected to generate $5.9 billion annually in gross gaming revenue. MGM Resorts Japan CEO Ed Bowers acknowledged the challenges faced, emphasizing that while the groundbreaking was a significant milestone, obstacles remain.
Nagasaki’s initial proposal, led by Casinos Austria, was ultimately rejected due to financing issues. As the second round of applications approaches, Nagasaki is expected to submit a revised proposal. Aichi Prefecture, which withdrew from the first round due to pandemic-related disruptions, is also anticipated to re-enter the bidding process. According to local reports, Aichi Governor Hideaki Omura was supportive of an IR development in the initial phase and may rekindle efforts to secure a licence.
Hokkaido Prefecture, which previously chose not to participate citing environmental concerns, is reconsidering its stance. Governor Naomichi Suzuki has indicated a shift in perspective, suggesting that an IR could significantly enhance tourism and attract private investment. Hard Rock International, a potential partner for Hokkaido, had previously proposed a resort featuring a guitar-shaped hotel. Jim Allen, Chairman and CEO of Hard Rock, emphasized the project’s potential economic benefits and its role in showcasing Japan’s cultural heritage.
Looking forward, the reopening of the bidding process presents both opportunities and challenges. While it offers a chance for localities to boost economic growth through tourism, the regulatory and financial hurdles remain significant. The successful implementation of these projects will depend on navigating these complexities and securing the necessary investments. As the application process unfolds, stakeholders will closely monitor developments, with the upcoming years likely to be pivotal in shaping Japan’s IR landscape. The next steps involve continued dialogue and preparation among interested prefectures and potential partners, leading up to the official application period in 2027.
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