Senior Industry Executives Raise Concerns Japan’s Casino Licensing Process

Senior Industry Executives Raise Concerns Japan’s Casino Licensing Process June 30, 2017 June 30, 2017 Paul Butcher
 General June 30, 2017 by Paul Butcher

Senior executives from the gaming industry have raised concerns regarding the Japanese government’s approach to the casino licensing process.

Speaking at an industry event, Daniel Cheng , senior vice president for business development (casinos) for Asia at Hard Rock Hotel and Casino noted that due to ambiguities in key aspects of gaming regulation like total number of licenses available and probable locations, smaller cities might get side-lined.

The event which was held by the Japan Tourism Research Association, was mostly attended by executives from Japanese companies that are keen to partner with international gaming operators.

Edward Tracy, chief executive of Hard Rock International’s Japan division also addressed the event highlighting the group’s presence in Japan.

Cheng’s presentation however focused on the many deviations in Japan’s licensing process from industry norms. He noted that the current format of a gaming company teaming up with a local government to pitch a proposal was unprecedented. Cheng stated that governments typically had significant social responsibilities which did not necessarily align with the interests of a private entity.

He also pointed out that since the proposal is to be subsequently submitted to the national government for approval, the licensing was a two-stage bidding process which was again unprecedented.

In the document presented, Cheng suggested an alternative approach that would be preferred by the industry. The key features of this proposal are: splitting up the political and commercial processes, ensure a single standard for bidding, clearly articulate the scope of an IR license and hold RFP process for selected locations.

Cheng also suggested that a pre-qualification process of gaming operators be carried out to create a shortlist of those eligible to bid. He has also urged the government to spell out the consortium bidding structure including the equity holding rules between Japanese and foreign partners and size of the consortium

Jane Tsai chief executive of casino industry consultancy firm JCT Holdings also spoke at the event and said that gaming companies were unable to communicate their preferences in one voice due to lack of a lobby group. She also warned that the government’s guidelines were not in line with industry norms.

In a statement Tsai said,

There is a commercially untenable gap developing between government academic theory and practical operational reality. In order for Japan’s integrated resorts to be successful, it is imperative that the Japanese central government engages experts with tangible IR and gaming operating experience, not just those that have studied integrated resorts from afar

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