Government Rejects Nagasaki Casino Resort Plans

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In a recent announcement, the Japanese national government revealed its decision to reject Nagasaki prefecture’s development proposal for an integrated resort (IR) with a casino. The rejection came as a result of concerns regarding the financial capacity of the private-sector promoters associated with the project.

The Japan Tourism Agency, operating under the Ministry of Land, Infrastructure, Transport, and Tourism, stated that the Nagasaki IR proposal did not meet the required standards set by Japan’s national basic policy on IRs. One of the main concerns cited was the lack of sufficient evidence to support the certainty of financing for the proposed Nagasaki IR. The pledge letters submitted by potential investors were deemed not legally binding or similar, raising doubts about the financial commitment to the project.

Another point of contention highlighted by the Japanese authorities was the significant changes in the parties involved in the Nagasaki IR proposal since its initial application. The government emphasized the importance of having experienced and knowledgeable operators who can effectively set up and operate an IR. The lack of evidence regarding the parties’ experience and know-how in the casino industry further added to the concerns raised by the government.

The Nagasaki proposal also failed to provide “sufficient evidence” that the operators of the IR would invest enough resources in mitigating the potential harmful effects of casino gambling on the community. The government’s scrutiny emphasized the importance of addressing the social impact of introducing a casino resort and ensuring adequate measures are in place to minimize any adverse consequences.

While Nagasaki’s proposal faced rejection, Osaka prefecture’s plan was approved by the national authorities. Both prefectures submitted their proposals simultaneously in April 2022. The contrasting outcomes highlight the divergent evaluations of the respective proposals and the varying levels of scrutiny applied by the government. Osaka’s approved plan signifies the government’s confidence in the financial capacity, experience, and measures proposed by the operators.

Nagasaki prefecture had set a fundraising target of JPY438.3 billion (US$3.07 billion) for its IR project, which was planned to be located at the Huis Ten Bosch theme park in Sasebo. The financial arrangers for the project included Credit Suisse AG, CBRE, and Cantor Fitzgerald Securities Japan Co Ltd. However, questions arose regarding the identities and expertise of the investment proposal’s backers, casting doubt on the project’s overall viability.

The rejection of Nagasaki’s casino resort proposal has significant implications for both the prefecture and the broader casino industry in Japan. Nagasaki had hoped to benefit from the economic boost and increased tourism that an integrated resort would bring. The setback highlights the rigorous evaluation process implemented by the government and the importance of meeting the required standards to obtain approval.

The Japanese government’s decision also reflects its commitment to responsible gambling and mitigating potential negative effects on society. The rejection of the Nagasaki proposal underscores the government’s emphasis on operators’ financial capacity, experience, and dedication to implementing measures to address social concerns.