Small cities face disadvantages in IR bidding process

Sunday 2nd of July 2017

Although the establishment of IRs have been presented by the Japanese central government as a plank in its policy of regional revitalization, some observers have pointed out that the IR Implementation Bill may have the effect of inadvertently disadvantaging the small, regional cities.

In May, Wakayama Governor Yoshinobu Nisaka vocally criticized what he saw as central government policies that favored the big cities like Osaka and Yokohama. At around the same time, representatives of major operators such as Las Vegas Sands and MGM Resorts made clear that they were not particularly interested in the smaller local locations.

At last week’s meeting of the Japan Tourism Research Association, Hard Rock International executive Daniel Cheng pointed out further disadvantages for the small cities in licensing bids: the central government’s decision to leave IR sitting to “market forces” (thus encouraging almost all operators to prioritize the more prized locations); the ability of big cities to compile more detailed plans at an early stage without overloading their administrative capabilities; and the financial expense to the local governments of making bids to the central government.

“We feel that metropolitan locations and regional locations cannot be combined into one basket,” Cheng said, “They should be separately classified and have separate criteria.”

However, not all international operators purport to share these share these concerns. Michael Mecca, President of the Galaxy Entertainment Group, tells Asia Gaming Brief, “We don’t see this as a competition between big cities or smaller locations, as the business model in every location will be different. We see this as an opportunity for all of Japan to create a new and highly successful industry.”

Bricks & Mortar IR Bill