Japan casinos would get Vegas-style regulator under legalisation plan

Reuters

* Japan casino plan has Vegas-style regulators

* Plan aims to shut out "yakuza" gangsters

* Plan would impose stringent 'suitability' checks

* Casino legalisation could pass early 2014

By Nathan Layne

TOKYO, Oct 4 (Reuters) - Japan would establish anindependent gaming regulator modelled on the authorities thatpolice casinos in Las Vegas and Singapore under a draft plan tolegalise gambling in a market seen as potentially thesecond-largest in the world.

The policy outline, which was prepared by Japanese lawmakerswho favour casinos and reviewed by Reuters, outlines broadstandards for licensing and regulating casino operators andtheir partners.

After more than a decade of lobbying by lawmakers, a bill tolegalise casino gambling is seen as having a good chance ofpassing in the coming months with the business-friendly LiberalDemocratic Party in power and after Tokyo -- a likely casinohost -- won the bid to host the Summer Olympics in 2020.

MGM Resorts International, Las Vegas Sands Corp, Melco Crown Entertainment and Wynn ResortsLtd are among the global operators that have showninterest in developing a casino resort in Japan.

Among the concerns lawmakers who favour legalising casinosbelieve need to be addressed is what measures will be taken tokeep out organised crime, known in Japan as the "yakuza." Toaddress those concerns, the draft plan calls for the creation ofan agency that would have control over the issuing of licencesand the policing of gaming operations.

"The hurdles to enter the business should be set high. Itshould not be easy for anyone to get a licence and participatein the industry," the policy plan says. "With proper regulationand enforcement of the law, there is absolutely no reason forcasinos to become hotbeds of criminal activity."

Details of the draft plan have not previously been reported.

The plan also recommends stringent checks on the"suitability" of the people and businesses involved of the kindconducted by the Nevada Gaming Control Board. For example,directors and senior executives of licensees in Japan would berequired to provide bank account, credit card, and tax recordsfor themselves and their families going back 10 years.

As a further safeguard, the agency charged with policingcasinos would be attached to the Cabinet and not part of anyministry. That is intended to prevent corruption and the"amakudari" practice of ministry officials retiring to cushyposts in the industry they once regulated, the draft plan says.

A group of lawmakers, including many from the ruling LiberalDemocratic Party of Prime Minister Shinzo Abe, plan to submit aninitial bill to parliament by the end of this year. If itpasses, possibly early next year, the government would have tocome up with concrete regulations within two years to legalisesome casino gambling.

That could mean the first casino resort would open in Japanby 2019, in time for the Olympics, lawmakers have said.

While the big global gaming operators have shown the mostinterest in the major urban hubs of Tokyo and Osaka, there aremore than a dozen smaller cities and towns across Japan lobbyingfor the right to develop casino resorts.

According to the draft plan, a transparent bidding processshould be established so that local governments would be on anequal footing with the big cities.

At the same time, the plan calls for a limit to be put onhow many casinos would be allowed initially so that regulatorscan ensure that the new gambling resorts are being run properly.

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