The Journal The Authority on Global Business in Japan

Could gaming be a cure for Japan’s economic ills? The approval on December 15, 2016, of a bill authorizing the establishment of integrated resorts (IRs) has opened the doors to investors and IR developers, and could be the shot in the arm that regional governments are looking for.

On February 23, Jim Murren, chairman and CEO of MGM Resorts International, one of the largest players in the industry, spoke to members of the American Chamber of Commerce in Japan at Tokyo American Club about the potential of the new policy. The event, “The Role of Integrated Resorts in Japan as an Engine of Growth,” was organized by the Tourism Industry Committee and Integrated Resorts Task Force.

Although the potential is great and the path is open, bringing IRs to Japan may not be an easy play. “Public opinion in Japan is poor,” Murren explained. “There is not a good understanding of what an integrated resort is. You say casino, and they hear pachinko; and they want no part of it.”

IRs are generally seen as mixed-use properties. But, as Murren emphasized, they are more than that. Housing a diverse range of facilities, from retail and restaurants to arenas, casinos, and other entertainment, they provide a multitude of revenue streams.

Murren sought to eliminate some of the concerns that have been raised, such as crime and gambling addiction.

“Crime—a potential concern—actually does not go up; it goes down,” he said. “And, intuitively, you should know why, because we’re creating economic activity, creating jobs, investing.”
Another concern is financial regulation, but Murren said this is not a problem for MGM.

“We are, in fact, a financial institution and are governed by the same rules and regulations [as other financial institutions],” he explained. “Because we are a leader in this industry, we are asked to provide information on responsible gaming, because compulsive gaming and addictive behaviors are a serious concern.”

Due to this fear of gambling, Murren suggested Japan look at hospitality that goes beyond simply gaming. He highlighted the need and capacity for meetings, incentives, conferencing, exhibitions (MICE) facilities in Japan.

Although complex, Murren anticipates “a tremendous boom to economic activity and international tourism” that will aid Japan’s regional revitalization.

“What a great way to be able to display all the wonders of this country.”

“When we do go into the market, the market reacts well,” Murren said, telling the audience about successful, well-received MGM projects in the United States.

When asked about Japan’s declining workforce, he stressed that patience is crucial. “It would be incumbent on anyone to take the time to work with local and government institutions, non-profits, and educational institutions to create the framework.”

To begin with, Murren explained, MGM reaches out years in advance to meet as many small and medium-sized businesses as possible. By doing so they guarantee sustainability.

“We cannot be sustainable as a company unless the communities in which we operate are in fact sustainable,” he said. Murren highlighted projects in the United States where the community was involved in the process of IR development and benefited from it.

In addition, ensuring that the IR is integrated with the local culture encourages visitors to be more adventurous and see more of the country.

He added that many promises are made at the start, such as how something is going to be built, who the project would benefit, how to market the property, and how the company would work with other local businesses. Keeping those promises is vital.

Surveying the need and the public’s desire for a project is necessary. For this, a needs assessment is conducted to ensure that any decisions contribute to the community, a process he believes will be both transparent and comprehensive in Japan.

“And that is my promise here, that if this is of the will of the people—and that’s not clear yet at this point, but if it is—I will work very hard with Japanese companies to develop something that would be uniquely Japanese.”

Maxine Cheyney is a staff writer at The Journal.