IAG June 2014 - page 4

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June2014
4
EDITORIAL
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Japan: aPost-Mortem
W
hen Japan’sNational Diet concludes its regular 2014 session thismonth it will do so
without voting on themuch-anticipated casino legalization bill crafted bymembers of
the Liberal Democratic Party’s governing coalition and introduced back in December.
There’s still an outside chance for salvaging a market in time for the 2020 Summer
Olympics in Tokyo if the bill is passed later this year in a special session expected to convene in the
fall, that is, if supporters can accomplish in amatter of weekswhat they couldn’t givenmore than six
months. If not, it’s back to the drawing board for 2015 and another try at rolling the stone of political
momentumup ahill that has shown itself tobe rather a steepone.
It wasn’t supposed togo thisway.
The pro-casino caucus in the House of Representatives, the more powerful of the Diet’s two
chambers, is said tonumber 200and includes veteran lawmakers close toPrimeMinister ShinzoAbe.
InMarch2013, not threemonthsafter takingoffice,MrAbewas in front of theHouse talkingabout the
important role destination casinos could play in boosting foreign tourism. The LDP and its coalition
partner, NewKomeito, hold a 67%majority in theHouse. In June 2013, they unseated the opposition
Democratic Party of Japan to regain amajority, albeit a slimone, in theupperHouseof Councillors.
So when the bill, niftily compressed within two pages, was unveiled at the end of last year amid
considerable media fanfare, most of the biggest names in the industry commenced in earnest to
tallying thepotential of amarket projected atUS$40billionover thenext decade.
Morgan Stanley sounded the first alarm in a client note issued toward the end of April that
suggested theLDPwasn’t satisfiedwith the support fromNewKomeitoand from small but influential
parties like the far-right Japan Restoration Party and the pro-business Your Party, not tomention the
oppositionDPJ. Thebank’s researchhad turnedup trendspointing to steadydeclines inpachinkoand
other downside risks inmacro areas touching on the potential of the domestic market. It also took
some shots at Japan’s viability as adestination for Chinesehigh rollers.
Thisneed foranall-embracing legislativeconsensushasplagued legalization from thestart andat this
stageyouhavetowonder if itdoesn’thintatcrackswithintheLDP,whichmaynotbehavingmuch luckeither
with devising a licensing and taxation regime capable of satisfying themany divergent political, business
and community interests that characterize Japan’s highly federalized prefecture system of government.
Certainly it’s apretty fair indicator of how controversial casinos are. Bear inmind, this is a countrywhose
national legislatureagreedonly thisyear toconsidermakingpossessionof childpornographyacrime (with
manga and anime exemptedunder the right to free expression). So the fact that noone’sbothered to ask
the Japanesepeoplewhat they thinkwouldseem tobemore thananoversight.
Actually, someonehas asked them. Investment bankCLSA commissioned anationwide survey that
was conducted in January among 1,000 adult men and women divided evenly across a range of age
groups. The resultswere published in a report on themarket the bank issued in February. They are not
comforting.One infive respondentswasn’t even aware a legalization effortwasunderway, andonly 7%
professedanyknowledgeof thedetails.Only15%answeredanunequivocal “yes” to thequestion“Doyou
think large IRs canboost the economy?” Fewer than 24% said they have a “good” or “somewhat good”
impressionof IRs.More than 51%said theybelieved IRswould result ina“significant increase incrime”.
Only 34% said theybelieve the “positiveaspectsof IRsoutweighnegatives”.
No onewho looked at these finding should have been surprised earlier thismonthwhen Tokyo’s
newgovernor, YoichiMasuzoe, apopular independent seenby some as a rival forMr Abe’s job, saida
casinowas not apriority for the city.
Inotherwords, the Japanesepeoplehavemore important things tooccupy them. Theworld’s third-
largest economyhasbeenstagnant for ageneration. Itwassick longbefore the tsunami andFukushima.
The economic revival the LDP promisedwhen it was swept back into office in a 2012 landslide has yet
tomaterialize. The soul-searching that is goingonnow is of a scalenot seen since 1945. They’re talking
about scrapping thewar guilt curriculum taught tochildren for60 years. It’san issuedear to theheart of
the nationalistMr Abe, who is also pushing constitutional reforms that imply remilitarization, which is
splitting thepacifists amonghis layBuddhistNewKomeitopartners and elevating the JRP, whichholds
54 seats in theHouse, into somethingof a spoiler’s roleon keypolicy issues.
This should have been good news for the casino caucus. The JRP is led by three of legalization’s
biggest supporters, OsakaMayor ToruHashimoto, the governor of Osaka Prefecture, IchiroMatsui,
andnationalist firebrandShintaro Ishihara, a former governor of Tokyo. Ironically, though, itmay have
helpedkill thebill at a critical juncturewhenMr.HashimotoandMr Ishihara fell outwitheachother in
May over how far togo in rewritingwhat the JRP calls the “OccupationConstitution”.
If theConstitutionwindsup thesubjectofanational referendum,which is likely,will thiscomplicate
the legalization effort? Possibly.Or itmay prove enoughof apopular distraction to simplify it.
At a time when casinos have never seemed more certain, or more elusive, it’s safe to say that
anything is possible, which is justmeaningless enough tobe true.
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