Sheldon Adelson’s Marina Bay Sands in Singapore is the most profitable and perhaps the most admired casino property on earth. But Adelson doesn’t want Marina Bay Sands to be the model for Japan’s casino legalization. (Photo credit: SeongJoon Cho/Bloomberg)

Las Vegas Sands Chairman and CEO Sheldon Adelson began his September in Japan. After meeting Osaka’s governor and mayor, the LVS founder complained about proposals to regulate potential casino development. Adelson joined a list of foreign gaming industry figures critical of the Office of Integrated Resort Regime Promotion’s Expert Committee report outlining possible rules for the second integrated resort bill expected later this year that would finish the job of casino legalization. At this stage of the process, international critiques are at best irrelevant and likely counterproductive, if the ultimate goal is to be part of integrated resort development in Japan.

Adelson complained that proposed regulations on casino size would not allow “the best kind of IR” in Japan, Asia Gaming Brief reports. He warned restrictions could limit investment in a single IR to US$5 billion or less, rather than the record US$10 billion that Adelson as well as his MGM Resorts International counterpart James Murren suggest could be possible in a major city such as Osaka, Tokyo or Yokohama.

Gaming industry executives have also complained about the casino entry tax expected to be imposed on Japanese and restrictions on casino visits using the national identification card system. But the main object of concern is casino size, especially if rule makers continue to embrace Singapore as a model.

Union Gaming Managing Director in Macau Grant Govertsen notes that Singapore’s limit of 15,000 square meters (161,400 square feet) in casino floor area for each of its two IRs means a total of 30,000 square meters for 6 million residents and 6.7 million incremental visitors. Placing one integrated resort in metro Tokyo/Yokohama and one in metro Osaka would have that same 30,000 square meters serving a combined 57.1 million residents, not even counting tourists. Govertsen likens those numbers to South Korea’s Kangwon Land, the country’s only casino open to Koreans, where people line up for hours seeking admission.

Indeed, a 15,000 square meter limit on casino size may not be appropriate for major markets in Japan. But critics are hyperventilating about a decision that hasn’t been made yet. It’s like a kid complaining about curfew before parents say time they need to be home. There was never any reason to doubt there would be a curfew; until we know the number, how can anyone have an issue?

Moreover, unless there’s been a dramatic shift in cultural norms, the worst way for a foreigner to get results in East Asia is through a direct public confrontation. In the specific context of Japan IRs, sniping at the rule makers doesn’t advance the larger cause of winning approval for integrated resorts, still far from a done deal.

“In parallel to debating the size limit on the casino facility, entrance fee and ID card issues, we have to legislate addiction measures and find national consensus on IRs,” PwC Consulting Senior Manager in Tokyo Masahiro Terada says. “That is the first priority of lawmakers.”

Polls show a firm majority of the Japanese public still opposes integrated resorts. A series of nine public hearings in various cities last month reportedly did little to change minds or even to indicate that the government is seriously considering public opinion on the issue. Japan’s leading advocate for integrated resort, Prime Minister Shinzo Abe, saw his support fall below 30% in one July poll due to growing distrust of the Liberal Democratic Party leader. Nevertheless, LDP parliamentary leaders say that before the end of the year they will introduce the second IR bill, the final legislative step toward casino legalization.

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In this volatile situation, foreigners would be well advised to declare they respect the process in Japan – LVS Managing Director for Global Development George Tanasijevich showed how at the Japan Gaming Congress, winning kudos by talking exclusively about combating problem gambling – and remain ready to assist Japan in creating integrated resorts that reflect the national consensus. That’s how to create the “best kind of IR” for Japan.