Inside Asian Gaming

INSIDE ASIAN GAMING | January 2013 8 COVER STORY spinoffs it promises. This is something that has eluded Japan in recent years relative to its neighbors, hampered in part by an expensive yen. Inbound tourism hit 8.3 million in 2010, a record, but it was only a 3% increase year on year and it left the country ranked only 30th in the world as a destination. And it was considerably belowMacau’s 25 million and Singapore’s 11.6 million, where travelers from mainland China figure prominently. The PRC is the second-largest source of visitation to Singapore, where its numbers have been growing at annual rates of 30%, and it’s nudging steadily toward 60% of total visitation to Macau. Prior to March 2011, Japan was the fastest- growing destination for Chinese travelers (after Taiwan and the United States). But that changed after the tsunami and the nuclear disaster at Fukushima. Visitation plunged across the board to 6.2 million, a 28% decline. In July 2011, the government began issuing multiple-entry visas to Chinese travelers good for up to 90 days, but these came with income requirements and other conditions, like a mandatory one-night stopover in Okinawa. In any event, the scheme did little to offset an erosion of sentiment between the two peoples over a number of issues, among thema heated territorial dispute over a chain of uninhabited islands in the East China Sea and the strident revisionism emanating from Japan in recent years relating to the atrocities committed by its armed forces in China in the last century. While Macau saw a 22% increase in visitation from the PRC in 2011 and Singapore 34%, the percentage drop in Chinese visits to Japan stood at 40% through most of the year, ending at a decline of 26%. Visitation from South Korea, the largest source of inbound tourism, was down 32% in 2011, also amid rising tensions between the two governments, fed by conflicting claims of sovereignty over islands that lie between the two countries and by inflammatory rhetoric from Japanese leaders on the issue of the“comfort women,”the thousands of Korean women forced to the front during the SecondWorldWar to serve the Japanese Imperial Army as sex slaves. In light of which, there is a lot to be said for the belief that casino legalization would go a long way toward getting Japan to the ambitious goal the national government has set of 25 million inbound tourists annually by 2020. CLSA believes a Tokyo IR will draw 5 million foreign players contributing US$670 million, amounting to more than 13% of projected revenues of $5 billion. “Should IRs be introduced in Japan, the growth potential for the nation’s tourism industry is significant, especially as it relates to Chinese tourists,” the firm said in its 2012 report. Where popular sentiment is leaning remains uncertain, however. A 2011 survey by two newspapers purported to show 60% support for legalization. Yet, a poll conducted in December of that year by business magazine Toyo Keizai found only 40% in favor and 47% opposed. CLSA said its own survey uncovered support from 43% of 600 respondents for a large IR, and only 20% opposed (but with a sizable contingent, 37%, professing to be undecided). Fixing History The talk of a legalization bill the last two years has drawn to Japan a procession of the industry’s high and mighty: MGM Resorts International, Wynn Resorts, Genting Singapore, Penn National Gaming, Caesars Entertainment boss Gary Loveman, who came to preach to the choir in September 2011, and Las Vegas Sands Chairman Sheldon Adelson, who journeyed to Tokyo last February to deliver a speech on “The Economic Benefits of Integrated Resort Development”. Of the politicians who have appeared at these events or who have otherwise made their support known, at least eight currently are sitting members of the House of Representatives. Their number prominently includes Shintaro Ishihara, who resigned as governor of Tokyo to enter the Diet last month. A champion of Japanese racial and ethnic purity, he adheres to the line taken by many politicians in opposing immigration as a solution to the country’s population dilemma. More infamously, he is known for belittling the 1937 “Rape of Nanking” as fiction and for offering to end the dispute with China over the Senkaku Islands (the Diaoyus, as they’re known in China) by having Tokyo buy them. He has suggested that the 2011 earthquake and tsunami were punishment fromheaven for Japanese “materialism” and “greed”. He has merged his happily named Sunrise Party (the literal translation is themoreominous“RiseUp, Japan!”) into Toru Hashimoto of Osaka’s Japan Restoration Party. Mr Hashimoto, a lawyer and former TV personality, an outspoken casino supporter, also denies the documented existence of the “comfort women” and advocates a national referendum on the clause in the Constitution renouncing war. Combined, their scary mix of nationalism, populism, social conservatism and disdain for democratic niceties picked up 43 seats in the December elections. They now hold 54 seats, only three fewer than the battered DPJ. Two others in the pro-casino camp, the LDP’s Toshimitu Motegi and Hakubun Shimomura, were given key posts in Mr Abe’s new government. Mr Motegi is Economy, Trade and Industry secretary, Mr Shimomura secretary of Education, Culture, Sports, Science and Technology. It’s a cabinet of “radical nationalists,” as The Economist describes it, 14 of its members belonging to the League for Going to Worship Together at Yasakuni, a controversial shrine commemorating executed war criminals. Thirteen support an influential group called Nihon Kaigi, which advocates a return to “traditional values” and rejects what it calls “apology diplomacy”. Mr Shimomura is an apt choice for this government. An advocate of scrapping the 1995 “Murayama statement”expressing remorse for the country’s wartime misdeeds, he wants to annul the verdicts of the 1946-48 International Military Tribunal for the Far East against the honored dead at Yasakuni, and he is likely to continue a process already under way of rewriting the country’s militarist past as it is Shintaro Ishihara—casino supporter, hero of the radical Right