Japan’s First Casino and its Projected Impact on the Industry

Japan’s first casino is set to open sometime in late 2030 as part of an integrated resort in the western city of Osaka. This significant step for the country is expected to generate considerable economic benefits. Stay tuned to learn about the impact the resort is projected to have on Japan’s economy and its developing casino industry.

Osaka Casino Resort Project Overview

The Osaka Integrated Resort was fully approved by the Japanese authorities in April 2023. The ambitious establishment is a joint venture between MGM Resorts International and the local Orix Corp. Each of the two companies holds a share of 40%. The remaining 20% is split between smaller local firms like Panasonic.

With a budget exceeding $9 billion, this is expected to be a state-of-the-art project. Visitors will be able to enjoy not one, not two, but three hotels with luxurious rooms, as well as a conference center, shopping mall, and other amenities. High-stakes gamblers will have access to a helicopter pad.

The Gambling Industry in Japan

Japan is a fairly conservative country, which naturally extends to its gambling sector. The latest development comes following decades of discussions. While proponents of the first casino in the country were focused on the potential economic benefits, opponents were concerned about the threat of gambling addictions and increased criminal activity.

Most gambling options are considered illegal by the Japanese Criminal Code, with only a few exceptions. Betting on horse racing, bicycle racing, asphalt speedway motorcycle racing, and powerboat racing is legal. The widely available Pachinko parlors (similar to slot machines) operate in a legal grey area. If you’re into online casinos, your only option is offshore gambling sites, which are not regulated by the country.

In 2018, Japan’s government passed legislation to allow Integrated Resorts (IRs) to operate casinos as part of their offering. A couple of years later, it also introduced more specific guidelines and rules for IRs. In the following paragraphs, we’ll focus on the main pros of Japan’s first casino and touch on some of the valid concerns raised by opponents of the idea.

Benefits of the First Casino in Japan

The Japanese casino industry is expected to reap many benefits after the opening of its first-ever Integrated Resort in Osaka. We’ve included the main pros below, and we’ll discuss them in more detail in the following paragraphs of this article.

Job Creation

With an initial investment of ¥1.8 trillion ($13.5 billion/£10.7 billion), the Integrated Resort in Osaka will be a giant establishment, including a casino, three hotels, a shopping mall, a ferry terminal, a helicopter pad, and more. The Osaka government has estimated that the resort will generate about 15,000 jobs, which is rather promising for the city and smaller nearby regions.

Decrease in Unemployment Rate

The significant job creation upon the construction and subsequent operations of the Osaka casino MGM resort will lead to a decrease in the unemployment rate in the region. According to data released by Statista, in 2024, the unemployment rate in Japan was 2.7% for men and 2.4% for women. Close to 1.8 million people could not find work, so new job opportunities would be helpful.

Revenue Generation

In addition to job creation and a decrease in unemployment rates, the casino resort is expected to boost Japan’s GDP through substantial revenue generation. Projections suggest annual sales in the region of ¥520 billion, with a considerable portion attributed to gambling revenue alone (¥420 billion).

This will contribute to increased tax revenue for both the local Osaka and the national governments and provide valuable resources for public services and infrastructure projects. Projected at ¥100 billion, the non-gambling revenue from hotel stays, dining, shopping, and other entertainment activities further improves the economic contribution.

The combination of direct revenue, tax income, and increased economic activity in associated sectors will undeniably affect Japan’s economy. The real potential of this GDP impact will be carefully monitored and assessed once the resort is fully operational, yet early projections indicate the potential for a significant economic upturn.

Tourism Boost

The casino resort is predicted to draw a significant number of domestic and international tourists. According to estimations by the Osaka government, the establishment might receive over 20 million visitors a year, and many of them are expected to be international tourists.

This will have a positive effect on various economic sectors in the country. The hospitality industry (hotels, restaurants, and transportation services) will experience an increase in demand. Related businesses, such as retail shops and entertainment venues, will also benefit from increased spending by visitors.

The economic impact will extend beyond Osaka, potentially drawing tourists to other parts of Japan and stimulating tourism throughout the country. We can’t be sure of the exact long-term effect at such an early stage. Still, the potential is there, and we believe that the positives on Japan’s economy will be considerably more than any negatives.

Shift of Gamblers from Macau

The Osaka casino resort can potentially draw visitors from the gambling capital of the world, Macau. Known for being the go-to place for affluent players from China, Japan, and other Asian countries, Macau has a flourishing economy due to its highly profitable gambling industry and tourism sector. A shift in market share benefiting Japan would be another welcomed advantage.

Potential Negative Impact and Concerns

Opponents of the first casino in Japan have raised valid concerns about potential downsides. Gambling addictions are the most significant issue faced by countries with more liberal gambling laws and expanding industries. A possible rise in crime rates associated with gambling-related activities is another thing to keep in mind.

The government has to create a safe environment for players and visitors to the Osaka casino resort. This includes developing responsible gambling initiatives and strategies to fight and prevent crime and minimize risks. Economy and tourism aside, we hope that the ambitious establishment will positively impact Japanese society.

The Asian Casino Industry Going Forward

The integrated resort in Osaka holds enormous potential to create new job opportunities, decrease the unemployment rate, boost tourism, and generate revenue for the country. However, Japan has to focus its efforts on responsible gambling measures and crime prevention strategies to minimize potentially adverse consequences.

It’ll be interesting for us to witness the development of this untapped market and the potential shift in market share within the growing gambling industry in Asia. The projected success of the first casino in Japan will serve as an example for other countries that have yet to decide whether or not to follow in the footsteps of their neighbours.