Nagasaki's Integrated Resort Hopes Suffer Death Blow

January 2, 2024
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Nagasaki’s campaign to host an integrated resort (IR) has collapsed after a central government ministerial advisory committee opposed the prefecture’s bid over funding, lack of operational experience and problem gambling concerns.
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Nagasaki’s campaign to host an integrated resort (IR) has collapsed after a central government ministerial advisory committee opposed the prefecture’s bid over funding, lack of operational experience and problem gambling concerns.

The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) announced on Wednesday (December 27) that it had rejected the prefecture’s proposal for an IR at Sasebo City’s Huis Ten Bosch theme park after considering the expert committee’s report.

Nagasaki’s application, in conjunction with the Casinos Austria-backed Kyushu Resorts Japan consortium, contained “insufficient evidence to support certainty of financing” the project, the report said.

The committee said “it would be appropriate not to certify the plan” given several changes to proposed financing arrangements during the application period, a lack of information on some would-be investors and a lack of clarity overall.

The report also said the proposal failed to alleviate concerns over “appropriate implementation of measures to eliminate harmful effects of casinos”, a part of wider doubts over the Casinos Austria International (CAI)-led consortium’s ability to “set up and operate” an IR.

“Furthermore, because [CAI’s] proportion of investment is very small and the level of commitment [expressed] in its letter is insufficient, it is difficult to conclude that the level of CAI’s capital in the IR project is adequate.”

The report added that the committee had little confidence the project would prioritise problem gambling mitigation given uncertainty over the division of profits between reinvestment, harm mitigation and investors.

Independent Sasebo councillor Hiroshi Honda on Wednesday expressed bitterness over the “huge loss for Sasebo City”, noting in a statement that support for the proposal transcended business and political interests, with only a minority of politicians opposing it.

“I can only say that I am disappointed, and I think everyone in the prefectural and city IR promotion departments are only more so,” Honda said.

The end of Nagasaki’s IR ambitions leaves Japan with a de facto IR monopoly in the hands of the MGM Resorts International consortium in Osaka, whose IR will not open for some six years.

It also adds to discomfort for a central government whose initial enthusiasm for a three-licence casino-resort market was not backed by understanding of operator obstacles, nor substantial variation in regional capacities to meet uniform funding and licensing criteria.

Even so, Japanese media are reporting renewed interest in a second round of central government licensing, with Hokkaido politicians pushing in November for a new tilt at an IR licence should it become available.

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