Japan could legalize Nevada-style casinos
June 20, 2014
KYOTO, Japan — This ancient city of more than 1,600 Buddhist temples has been on our "must see" list during our 10-day visit to Japan, and Ludie and I traveled the 320 miles from Tokyo southwest to Kyoto by bullet train or "Shinkansen" as it is called locally, in an astonishing 2 hours and 18 minutes.
But while rushing about to see a representative handful of the most spectacular temples, shrines and 17 UNESCO World Heritage Sites here in just three days, we came upon a slew of other Japanese landmarks that are found in Kyoto and throughout all of Japan: Pachinko gaming parlors.
Although legalized gambling is generally banned in Japan, there are an estimated 13,000 pachinko parlors in the nation as well as national lotteries and legal betting at horse, automobile, motorcycle and boat races, all of which are permitted by local statues.
Many of Kyoto's ubiquitous pachinko establishments are centered around the city's downtown area and shopping malls, and I visited several of them to learn what pachinko gaming is all about.
Making my way through plumes of cigarette smoke, I found gamblers standing or sitting before rows of pinball-like slot machines trying to navigate small silver balls into small holes or slots. When a player "wins" by filling a prescribed number of holes, he is awarded a "prize" consisting of a small piece of gold that he then redeems for cash at an adjoining shop run by the pachinko parlor's operator.
The parlors, I learned, are a $200 billion annual industry. Pachinko gambling is a national obsession, with one in six Japanese playing the game. The parlors are regarded legally as amusement activities, like hostess bars and arcade games, and the pachinko operators, who number about 4,000, pay no gaming taxes.
Several influential Japanese lawmakers, with the blessings of Prime Minister Shinzo Abe, are now attempting to legalize big-time, Nevada-style casino gambling to bring added revenues to the country's sluggish economy and stagnant tourism industry. Casino backers claim the casinos would initially bring in an annual take of $40 billion and could, someday, even rival the revenues from gambling in Macau and Las Vegas. Singapore, add the gambling proponents, legalized casino gambling just four years ago, and that tiny Asian nation-state has seen tourism expand by 60 percent and gambling revenues spiral since the casinos were opened in 2010.
Prime Minister Abe and the bi-partisan group of legislators supporting the advent of casinos gambling say that the casino legislation must be approved this year, arguing that countless billions could be earned by the casinos if they are completed in time for the 2020 Summer Olympic Games that are to be held in Tokyo from July 24 through Aug. 9 that year. Hundreds of thousands of tourists will flood Japan before, during and after the Olympics, and if the casinos are up and going by then, the nation's coffers would be overflowing from taxes paid by casino revenues and the additional tourism revenues, say the casino backers. Large gaming revenues also would result from the 2019 World Rugby Games, also to be held in Tokyo. state the casino proponents.
Supporting the casino legislation and making promises to spend billions on massive casino-hotel projects are several big-name American and foreign casino operators including Sheldon Adelson, chief executive of the Las Vegas Sands Resort, whom Forbes Magazine estimates has a personal worth of $39 billion and is the world's 13th richest person. Adelson has pledged to invest $10 billion to build a Japanese casino-resort here in the Kyoto area or in Tokyo.
Other gambling moguls who have stated they are interested in building casinos in Japan are Neil Bluhm, who owns casinos in Pennsylvania, Illinois and New York; Las Vegas Wynn Resorts Chairman Steve Wynn; Macao casino owner Lawrence Ho; and Australian James Packer, who owns several casinos and a large publishing company.
If, for any reason, the gaming legislation is not passed by the Japanese legislature this year, "We believe it is exceedingly unlikely that the first casino resort could open prior to 2020," said Grant Goverston, an analyst at the investment bank Union Gaming Group.
Opposition to the casino legislation is fierce, with many opponents citing moral and religious reasons.
The well-regarded English-language newspaper Japan Times, for example, said this week in an editorial headlined "Casino Gambling Bad Bet for Japan" that legalized gambling in the U.S. and Great Britain has brought about huge increases in gambling addiction, crime, personal debt and mental health issues.
"Most tax revenues from gambling taxes would be offset by expenditures for treating addictions, fighting crime and helping gamblers in debt. Letting the gambling industry operate in Japan is a terrible bet. Japan will lose," said the editorial.
Meanwhile, here in beautiful Kyoto, I am standing in the center of an aisle at a pachinko parlor flanked by gamblers mesmerized by flashing LED lights as they try to maneuver the small silver balls into little holes.
If enough balls enter the slot, the player wins.
If not, he loses.
David C. Henley is Publisher Emeritus.