In July 2018, the integrated resort implementation bill, commonly known as the “IR bill (casino bill),” was passed. The bill stipulates that there will be three integrated resorts, including casinos like doubledown promo codes, and there is still a battle to attract the first IR (integrated resort) among prefectures. Here, I would like to explain the details of IR and how much economic effect can be expected by attracting casinos.
Expectations rise as a trump card for Japan’s economic growth
Some people may think of IR as a public relations activity for corporate investors (Investors Relations), but IR here refers to “integrated resorts including casinos (integrated resorts).” It is a comprehensive facility that includes not only casinos but also hotels, shopping malls, conference halls, exhibition halls, theaters, and parks. In Japan, the law did not allow the establishment of casinos, so it was necessary to amend the law to establish casinos. The government seemed to want to make it in time for the 2020 Tokyo Olympics, but it has taken time to deliberate in the Diet, and opening a casino by 2020 has become practically difficult. However, although there is a high possibility that it will not be in time for the Olympics, considering that some Japanese companies are working to expand the casino business in collaboration with foreign capital, it will be global in Japan in a few years. It is expected that IR will be born.
When and where will integrated resorts be born?
The IR bill limits the number of facilities to three in Japan for the time being, but seven years later, in 2025, it is stipulated that the number of facilities can be revised in the future. In addition, the consent of the local government is required for the installation, the payment to be imposed on the casino operator is 30% of the revenue, and it is distributed by 15% each between the national and local governments, and the revenue is basically the public interest. It is also stipulated that it will be used for the target business.
Does the indirect consumption boost effect alone boost nominal GDP by 0.2%?
So how much economic effect can IR actually expect? Daiwa Institute of Research produced a report on economic spillover effects nationwide in 2017. According to the report, it is estimated that the construction cost will be about 5 trillion yen and the production induction effect of about 2 trillion yen every year (≒ primary economic effect by casino construction) can be expected (referring to IR in Singapore, Hokkaido, Yokohama). , Assuming that IR facilities will be built in 3 locations in Osaka). In addition, the income of people hired for IR construction will increase, which is expected to have an added value-inducing effect of 1,140 billion yen (≈ secondary economic effect) as an effect of boosting joint consumption. The amount of value added by this consumption alone is equivalent to 0.2% of Japan’s nominal GDP. You may feel that it is not a big deal, but Japan’s potential growth rate is said to be around 1.0%, and 0.2% is by no means a small number.