Japan's Integrated Resorts Experience More Delays

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Meta Title: Development of Japanese Integrated Resorts Faces Delays

Meta Description: We explore what lies behind the stagnation of Japan's Integrated Resort project which has the potential to revolutionize Japan’s tourism industry.

There appears to be great excitement surrounding the possibility of building the first integrated resorts in Japan. It is believed that it will have a considerable impact on Japan's tourism industry, by creating new job possibilities and generating billions of dollars in revenue. However, the whole process is being repeatedly delayed and postponed as was seen in the case of the IR Implementation Act. The law was passed in 2018 but did not actually come into effect until July 2021. And since then it seems that the process has come to a halt.  So what is holding back Japan’s emerging industry?

Japan’s IRs: An Ongoing Debate

The disagreement between supporters and opponents of Integrated Resorts (IRs) has hampered the project considerably. Those in favor of IRs welcome the opportunity to boost economic growth, while opponents point out the risks to individuals and society.

Others believe that legalizing online casinos in Japan will undermine Japanese society's essential cultural values and traditions. People, political leaders, and organizations say that the government should take precautionary precautions by developing effective regulations to tackle these issues before proceeding with the IRs projects.

There are also environmental worries over Yumeshima Island, which has been chosen as the future IR location. Environmentalists are concerned about soil contamination, which will cost $1.2 billion to remediate. The largest concern is the man-made island's ability to support a structure of this size.

Because of these contrasting viewpoints, Japan has a deeply ingrained cultural resistance to gaming and betting. This is the product of several laws and restrictions that have been in place for a long time, and the public is concerned that these initiatives will result in greater crime as well as financial and addiction problems for many.

Japanese Government Treads Carefully

Two successful candidates, Nagasaki and Osaka, submitted their proposals for IRs in April 2022 and were expecting to receive feedback by the end of the year, which did not happen. The Japanese Government did not accept nor did they reject the proposals. The Ministry of Land, Infrastructure, Transport, and Tourism decided to ask for more information on the design and financing of the projects. So, the two prefectures are now stuck in limbo and need to balance between the administrative demands of the Government and the financial pressure from foreign partners.

Osaka and Nagasaki have partnered with Casinos Austria and proposed developments that will cost $8.4 billion and almost $4 billion respectively. The resorts will feature hotels, a MICE center, a shopping center, a theater, and other leisure and entertainment facilities. And they will create over 15,000 new jobs.

The plan was to see the first resort finished by 2025 and the next one by 2029. But, until a positive answer is received from the Japanese Government, they cannot begin with construction works. In the meantime, a third contender has emerged again with Wakayama returning to the IR race.   

In order to complete the construction of IRs in Osaka and Nagasaki, the Government and the Ministry of LITT require a 24-hour operation of airports, buses, and trains. This investment will have a ripple effect on other businesses in the area, providing a financial boost to the local economy. Additionally, new interactions and events created by the IRs will promote further economic development by creating a favorable environment.

However, the realization of the Osaka and Nagasaki IRs is far from finalized. And now the investors are wondering if they will be able to withstand the financial costs of the Japanese Government or will have to activate the escape clause in their contracts. The more delays the project suffers, the more the costs increase, raising doubts about the Government's ability to finalize this project in the near future.

Final Thoughts

The recent announcement of a launch delay has caused Japan's IRs plan to encounter yet another obstacle. Numerous worries have been voiced regarding the probable environmental and social implications of this project, which has become one of the most contentious debates in the country. Nevertheless, the Government is determined to proceed with the plan as they understand the need for economic development and progress. In addition to brick-and-mortar casinos, the Government will need to examine the regulations surrounding Japan’s online casinos. Without a doubt, the IRs will have a positive effect on Japan's tourism industry and economy, yet the future of the project continues to remain uncertain.