By Anthony Fensom, Akio “Arthur” Matsumoto, and Kansai External Affairs committee members for The Journal (ACCJ)

Osaka has emerged as an early favorite to host one of Japan’s first Integrated Resorts (IRs) following recent passage by the Diet of what lawmakers call the “IR Bill.” While supporting this development, the American Chamber of Commerce in Japan (ACCJ) urges the establishment of the necessary frameworks to ensure IRs become a vibrant contributor to the Japanese economy, that the implementation of these laws will allow the creation of world-class IRs in Japan, while managing issues such as organized crime prevention and problem gambling.

In Japan, IR has become the term used to describe not only a casino but a resort development comprising hotels, entertainment, shopping, gourmet restaurants, cultural elements, and other tourist attractions.

According to estimates by the Kansai Association of Corporate Executives, an IR in the Kansai region will result in investments of up to ¥800 billion, generate annual revenues of up to ¥600 billion and create nearly 100,000 jobs. Research conducted by Oxford Economics, one of the world’s foremost independent global advisory firms, for the ACCJ highlighted potential GDP benefits amounting to ¥950 billion (0.19 percent of national GDP) from an IR in Osaka.

Osaka’s Yumeshima District is being eyed as a possible location for an IR, given the area has more than 80 hectares (about 80,000 square meters) of municipal land available. There are other location candidates with smaller land areas elsewhere in Osaka and Wakayama Prefecture.

The development of an IR will require numerous facilitating changes, such as 24-hour operation of airports, buses, and railways—similar to the gambling mecca of Las Vegas, Nev. Such investment will also benefit other businesses and parts of the Kansai region, triggering an increase in meetings, incentives, conferences, and exhibitions — or MICE — tourism.

Japan’s IRs must compete with existing IR destinations such as Singapore and Macau. A favorable legal and regulatory framework must be created in the upcoming regulatory implementation stage which will allow for the creation of world-class IRs to be built in Japan.

To maximize the economic benefits and manage the social impacts, the ACCJ has made a number of recommendations concerning the legal framework for IRs, some of which are:

-- Regulatory oversight of Japan’s casino industry should be placed in a Casino Regulatory Board, with day-to-day operations managed by a Casino Regulatory Committee

-- All companies involved in Japanese gaming and major suppliers should be properly and thoroughly investigated before any licenses are granted

-- The qualification process should include focus on the applicant’s ability to meet national objectives such as attracting tourists and generating tax revenue

In view of the passage of the IR Bill and the upcoming implementation stage, the ACCJ is now in the process of updating its viewpoint for IR in Japan.

By implementing the appropriate framework, it will be possible to ensure the successful creation of a new gaming industry for Japan, which will further boost the rapidly growing tourism industry.

Osaka had more than 9.4 million foreign tourists in 2016, an increase of 31 percent over 2015, and triple the number for 2013. For Osaka, hosting the nation’s first IR will give the entire Kansai region’s tourism industry a major injection of investment and international visitors in line with the national drive toward 40 million annual inbound tourists by 2020.

With foreign visitors increasingly venturing into areas of Kansai outside Kyoto and Osaka, and a world-class IR resort in Osaka becoming reality, the ACCJ–Kansai External Affairs Committee has been engaged with the Union of Kansai Governments for the creation of a destination marketing organization (DMO) to establish and market the Kansai brand overseas.

Custom Media publishes The Journal for the American Chamber of Commerce in Japan.

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