IR operator selection and the US-Japan Alliance

The selection of Ado Machida to front Hard Rock’s effort to win an IR license in Japan highlights a trend that was already clearly visible—some US operators are attempting to leverage in a not-too-subtle fashion the military and security links between Washington and Tokyo.

MGM and Hard Rock have now both appointed as their Japan presidents individuals who have no gaming industry experience, but strong US-Japan Alliance credentials. Caesars, meanwhile, appointed a board of advisors led by former US Senate Majority Leader Tom Daschle and former US Assistant Secretary of Defense Richard Armitage. Las Vegas Sands—rightly or wrongly—is widely accused of utilizing Sheldon Adelson’s clout with the Trump administration to power his firm’s bid to success.

There are two related conclusions that can be drawn from this behavior. First, some major US operators seem to believe that decisions about which operators will win licenses will be influenced by political factors unrelated to gaming industry matters. Second, they believe that the decisive levers of power over operator selection may be held by the central government, not the local governments, as envisioned by the IR Implementation Act.

Inadvertently, these personnel decisions are adding credence to the opposition’s view that the legalization of casino gambling is Japan is largely a political payoff to the Americans and an effort to create a lucrative revolving door for high-level politicians and bureaucrats.

Toru Mihara, professor of Osaka University of Commerce, says that if some US operators think US-Japan Alliance figures are going to do them any good, they are wrong. “It may be a waste of time and money,” he states.

“Even the Cabinet Office or the central government has no power to influence the decision of the local governments,” asserts Mihara. Moreover, it won’t even be the local politicians and bureaucrats who select the IR operators, but rather third-party committees who will be strictly insulated from all political pressures.

“If the political people tried to intervene,” Mihara warns, “it would be a huge scandal. It would be a nightmare for Japan.”

One aspect that Mihara does approve of, however, is the fact that people like Hyland and Machida are fluent in the Japanese language and know how to communicate with the Japanese people.

“To hire Americans who know about Japan is a good sign for the general public,” he says.