Opposition rises against casino projects in 3 prefectures

Authorities in Osaka, Wakayama and Nagasaki prefectures are now racing against time to overcome a variety of challenges in their plans to host casino-centric integrated resorts (IRs).

Local governments in western Japan have until April 28 to submit their final IR development plans to the central government after approval by their local assemblies.

However, opposition to the planned casinos has grown among local residents, and financial and other issues remain.

The prefectural and municipal governments of Osaka have already drawn up a plan to build an IR on the artificial island of Yumeshima in the city.

“(RI) will be an engine of sustainable economic growth for Osaka and the Kansai region,” Osaka Mayor Ichiro Matsui said during a February 25 city assembly plenary session. “We will work together with the prefectural government to realize the plan at an early date by promoting citizens’ understanding and taking action against gambling addiction.”

Matsui said the IR plan won public office when it was part of campaign platforms in mayoral, gubernatorial and other elections won by himself and his political allies, including the governor. by Osaka Hirofumi Yoshimura.

However, the Osaka City Assembly has received around 130 casino-related petitions which are mostly skeptical of the project. Some are calling for the plan to be scrapped. Others are calling for a referendum on whether the region should host the station.

The city assembly secretariat said the number of petitions was higher than received in a referendum held in 2020 on whether to administratively reorganize the prefectural capital of Osaka into a metropolis like Tokyo.

A lingering issue is the city government’s unprecedented decision to assume 79 billion yen ($687 million) at the behest of the project consortium led by MGM Resorts International and Orix Corp., in part to cover the costs of prevention of soil liquefaction at the Yumeshima Island site.

Critics have also said that visitor and revenue estimates are based on ambiguous motives and only optimistic projections have been published.

LOCAL POLITICAL BATTLE

An artist’s concept of a planned casino-centric integrated resort in Osaka (provided by MGM Resorts)

“RI is key to Japan’s efforts to become a leading tourism nation,” said Prime Minister Fumio Kishida, also chairman of the Liberal Democratic Party.

The LDP, however, is in opposition at the municipal and prefectural levels in Osaka.

Matsui and Yoshimura are from Osaka Ishin no Kai, a regional political party closely tied to the national opposition Nippon Ishin no Kai (Japan Innovation Party).

The local LDP chapter is spearheading moves in the Osaka city assembly to question officials about issues with the IR’s development plan.

The LDP caucus at the February 10 assembly submitted a draft ordinance on holding a referendum on the RI plan. But Osaka Ishin no Kai and Komeito rejected the proposal.

The LDP remained critical of the plan, saying local authorities are under the thumb of the resort’s future operator and costs covered by the city government could still snowball.

Citizen activism is also gaining momentum.

On February 10, nine civil defense groups submitted a joint petition with more than 71,000 signatures against the IR project to prefectural and municipal governments.

Another group was founded on February 20 to start a new petition to demand that the governor establish an ordinance to hold a referendum on the issue.

The Osaka prefectural and city governments held the four scheduled public hearings to hear residents’ views under the Specified Integrated Resort Area Development Law.

Authorities, however, canceled four of 11 meetings scheduled to explain the IR project to residents, citing rising COVID-19 cases.

The Osaka Bar Association called for the IR’s development plan to be withdrawn in a statement from the president released on February 25.

The Osaka prefectural and municipal governments reached a basic agreement with the project consortium on February 15.

A banking syndicate led by two megabanks, MUFG Bank and Sumitomo Mitsui Banking Corp., will provide 51% of the initial investment of 1.08 trillion yen in loans.

The remaining 49% will be funded by investments from MGM Resorts International, Orix and 20 other companies, including Panasonic Corp. and Kansai Electric Power Co.

FUNDING CONCERNS

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An artist’s concept of a planned casino-centric integrated resort in Wakayama (provided by Wakayama Prefecture)

In Wakayama and Nagasaki prefectures, potential operators seem to have difficulty finding lenders and investors for IR projects.

Wakayama Prefecture had planned to release a draft IR development plan in November, but a special committee of the prefectural assembly called for a resubmission, citing uncertainties in the fundraising schedule.

However, no overall picture of potential investors and lenders was presented at a Feb. 7 meeting of the special committee.

Officials from the prefectural government and the Canadian investment firm Clairvest Group told the committee that 70% of the initial investment of 470 billion yen will be financed by loans and 30% will be covered by investments.

While Credit Suisse Group will lead a syndicate of banks, no other financial institutions have been identified.

Clairvest and US casino operator Caesars Entertainment will take a 55% and 5% share of the investment, respectively.

But of the dozen investors expected to provide the rest, only Nishimatsu Construction Co. has been named.

Committee members criticized the plan, saying it provided no convincing information to residents of the prefecture.

But the committee gave the green light to take the next step, such as soliciting public opinion and holding hearings on the draft IR plan.

He cited the approaching deadline for submitting the IR plan to the central government.

Some residents raised concerns about funding during prefectural government explanatory meetings held between February 28 and March 6.

The complex is planned in Wakayama Marina City in the prefectural capital of Wakayama.

In December, a civil defense group demanded that the mayor issue a referendum ordinance after collecting 20,000 signatures, but the city assembly rejected the proposal.

Group officials said they would continue to express their views at public hearings and other occasions.

MORE DISCUSSIONS REQUESTED

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An artist’s concept of a planned casino-centric integrated resort in Sasebo, Nagasaki Prefecture (Provided by Nagasaki Prefecture)

The Nagasaki Prefectural Government is preparing a draft plan to build a casino in Huis Ten Bosch Theme Park in Sasebo City.

However, officials from the prefectural government and the Japanese branch of Casino Austria International did not announce any lenders or investors during a meeting with members of the prefectural assembly on March 10.

According to the plan, the project requires 438.3 billion yen in initial investment, of which 60% will be covered by loans and 40% by investments.

Kengo Oishi, who was elected governor of Nagasaki Prefecture on Feb. 20 and took office on March 2, said IR is necessary to revitalize the regional economy.

Oishi plans to hold public hearings, receive approval from the prefectural assembly for the draft IR development plan and achieve other milestones by the end of March.

Some said the time frame is too short to publicize the draft plan and discuss it in depth.

“Many are concerned not only about the funding ability of the resort operator, but also about the proposed construction of the resort in Huis Ten Bosch, a popular destination for school trips,” said Koji Araki, secretary general of “ Stop the Casino!” Nagasaki Prefectural Residents’ Network,” an advocacy group. “We ask for many explanations.”

(This article was written by Ai Asanuma, Noriki Nishioka, and Chifumi Shinya.)

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