Small cities seen losing out on IR license

Seth Sulkin, the head of the American Chamber of Commerce in Japan’s task force on IRs, told Asia Gaming Brief in an exclusive interview that he does not believe any of the smaller regional cities in Japan will be able to put together an effective bid for an IR license.

The anticipated 3 percent limit on casino floor space in proportion to the entire IR facility is the nub of the issue, Sulkin believes. By his estimate, the overall construction costs to build an IR in a regional city such as Tomakomai, Hokkaido, will likely run to the $4 billion or $5 billion range. He believes this price tag will dissuade all foreign investors once they really get into the numbers.

“I simply do not believe there is a gaming company willing to invest 4-to-5 billion dollars in Tomakomai.” Sulkin adds, “There are a number of small- and medium-sized gaming companies that are interested in regional cities, but I’ve met some of them and I’ve actually taken them through the calculations. Until I pointed this out to them, none of them had actually thought about these issues.”

Sulkin believes that the likely terms of regulation are consciously designed to be unfavorable to the regional cities. He asserts, “I think the central government’s position is, they don’t want to select a small market in the first round… I think in the first round they want to limit it to greater Tokyo or greater Osaka, and then, I think, ultimately, they will change the law to allow IRs in smaller markets.”

For extended video excerpts from the Seth Sulkin interview, click the link here.