Japan Moves Closer to Legalizing Casinos

TOKYO—Japan's parliament on Tuesday took a major step toward legalizing casino gambling, a goal shared by Prime Minister Shinzo Abe and U.S. casino companies.

Parliament's lower house passed a bill promoting casinos on Tuesday and sent it to the upper house for review. Mr. Abe's Liberal Democratic Party, which controls the two chambers with a smaller coalition partner, said it hoped to enact the bill before the current parliament session ends next week.

The bill wouldn't legalize casinos immediately. It calls on regulators to develop specific plans on issues such as licensing operators and preventing gambling addicts from using the casinos. Parliament would then need to approve final legislation for legalization. Proponents say they hope casinos could open in the early 2020s after the 2020 Summer Olympics in Tokyo.

Japan prohibits casinos but permits gambling in other forms. Publicly licensed bodies run lotteries and betting facilities for horse racing. And millions of people play pachinko, a Japanese version of pinball, at privately run parlors. Pachinko winners can exchange prizes for cash at shops that operate in a legal gray area.

Mr. Abe has sought to unlock the casino business since he became prime minister in December 2012, part of his strategy to put the nation on a growth track. Advocates say casinos would further boost Japan's fast-growing tourism industry, which reached 20 million foreign visitors for the first time this year, and lure international conferences.

Opponents say the casinos could encourage criminal activity such as money laundering and worsen the nation's gambling-addiction problem.

Global casino companies including MGM Resorts International, Caesars Entertainment Corp., Las Vegas Sands Corp. and Wynn Resorts Ltd. have long eyed Japan as a promising area. The companies worked to gain support for the bill, which envisions the type of large-scale casino resorts in which they specialize.

Jan Jones Blackhurst, who heads government relations for Las Vegas-based Caesars Entertainment, said Japan has been on the company's radar for more than a decade. She said it was the company's priority for expansion, along with Brazil, and she has been going to the country every six weeks or so.

"We're very encouraged with the progress. We think the legalization of [casino resorts] would be excellent for job creation and growth of tourism, and we would be very interested in being part of the process if it moves forward," Ms. Jones Blackhurst said.

Analysts say Japanese casinos would likely be jointly built and operated by domestic developers and overseas casino companies.

Polls show a majority of Japanese oppose casinos, and the bill drew opposition from groups including the Japan Bar Association. A poll by the Yomiuri newspaper released Sunday found 57% of respondents opposed legalizing casinos while 34% were in favor.

"I can't see how this could be justified as an economic growth strategy because it just fleeces money from citizens," said Japanese Communist Party lawmaker Akira Koike.

Groups involved in combating gambling addiction said they hoped the casino bill would prompt the government to take more steps to protect the public.

Alexandra Berzon contributed to this article.

Write to Takashi Mochizuki at [e-mail]

(END) Dow Jones Newswires

December 06, 2016 01:25 ET (06:25 GMT)

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