IR Policy Delay Now Close to Inevitable

Putting aside the question of whether or not Japan’s IR development will eventually proceed along the current policy lines or not, developments in the past weeks have made it increasing difficult to believe that the timeline will be maintained as currently planned.

To be clear, the central government has fallen silent regarding its IR development policy, so the possibility does remain that they will soon step forward and affirm the current plans, but that doesn’t seem likely.

To review, the Casino Regulatory Commission was established in early January according to schedule, but the basic IR policies of the Ministry of Land, Infrastructure, Transport and Tourism, which were meant to be published that same month, were delayed, and we still have no indication when they will be forthcoming.

The four local governments expected to bid for the three available IR licenses—Yokohama, Osaka, Wakayama, and Nagasaki—have all been pressing forward with their own plans in spite of the lack of visible guidance from the central government. They are, as far as we know, still planning to select their IR consortium partners this summer and autumn.

Supposedly, their proposals to the central government will then be accepted from January 4 through July 30, 2021.

In the meantime, however, travel between Japan and the rest of the world has become more difficult due to various Covid-19 national entry restrictions, and uncertainty about whether soft lockdowns will become hard lockdowns that entirely sever international travel.

For the international IR operators compiling their proposals for the local governments, it is very difficult to work under conditions such as an inability to have free exchanges with their foreign company colleagues, and in some cases with employees unable to visit even their local offices.

Moreover, the attentions of senior executives of the IR firms that might otherwise have been pouring over their cherished Japanese development plans, are instead fully absorbed by the closures of their flagship properties and all of the other business brushfires that currently need to be addressed.

From where the matter stands today, it would appear that the big Las Vegas operators in particular have a long, hard fight in front of them in an American society whose healthcare system and other institutions are very poorly positioned to contain the Covid-19 outbreak.

Also, as Daniel Cheng noted last week, both the international IR operators as well as their prospective Japanese IR consortium partners are going to need to reassess their own financial capabilities in the wake of the coronavirus crisis and the delay of the Tokyo Olympics, and the answers they are looking for will likely be many months in coming.

We could go on, but the basic point is not difficult to grasp—neither the Japanese government nor the gaming industry is really in any position at this moment to handle the IR process according to the current schedule. Attention on both sides is necessarily focused on more immediate problems, and firm financial projections have become impossible.

It remains to be seen if the Abe government will elegantly bow to these realities and announce a timeline delay of a year or two, or if they will obstinately push forward with “resolve”—as they initially did with the Olympics—until other stakeholders pull the rug out from under them in any case. (AGB Nippon)