Japan Turns Down Integrated Resort Plan for Nagasaki

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In a setback for the expansion of casino gambling in Japan, the government's expert panel has rejected a plan to open an integrated resort (IR) in Nagasaki Prefecture in southwestern Japan. The decision was reportedly made due to concerns about the project's financial feasibility and lack of clarity surrounding the investment proposal.

End of the Line

The Nagasaki IR plan, proposed to be a joint venture involving Casinos Austria, had envisioned a casino complex situated within the Huis Ten Bosch theme park in Sasebo. The project aimed to attract an estimated 8.4 million visitors annually and generate JPY330 billion (US$2.3 billion) in economic benefits for the region.

The plan was projected to cost JPY438.3 billion (US$3.07 billion). That's significantly lower than the Osaka IR plan, which presented a projected construction cost of JPY1.08 trillion (US$8.1). However, Osaka, which is building the IR with MGM Resorts International, expects to attract an estimated 20 million visitors a year, with an estimated economic benefit of at least $15 billion annually.

However, the expert panel, which is part of the Ministry of Land, Infrastructure, Transport and Tourism, raised concerns about the project's funding structure and the lack of transparency regarding the investment backers. According to reports, several commentators had questioned the financial experience and expertise of those involved in the proposal.

This rejection marks the second setback for Nagasaki's IR ambitions. In April, the government approved the construction of an IR in Osaka, Japan's first foray into casino gambling. The Osaka IR, set to be built on an artificial island in Osaka Bay, is expected to attract over 20 million visitors annually and generate substantial economic benefits.

Osaka beat Nagasaki in becoming the first IR host in Japan. That also means that it will be the first between the two to begin to benefit from a substantial increase in tourism.

Japan Remains Cautious on Casino

The rejection of the Nagasaki IR highlights the government's cautious approach to expanding casino gambling. The government is reportedly prioritizing projects with a clear financial plan, a strong track record of experience in casino operations, and effective measures to address gambling addiction.

Despite the setback, Nagasaki Prefecture remains committed to pursuing an IR license. The prefecture has vowed to review and refine its proposal, addressing the concerns raised by the government panel.

With the Osaka IR project in the pipeline, Nagasaki faces an uphill battle in securing government approval for its own IR aspirations at this time. However, the government has previously indicated that it could allow additional IRs in the future, which could give Nagasaki another chance.

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