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Japan Government Wants to Increase Taxes and Limit Casino Visits

- February 21, 2018 By Riley Wilson -

Problems on the horizon in Japan

Japan ponder huge tax hikes and restrictions on casino visits.

Latest reports from Japan have sent shockwaves through the country’s gambling industry.

According to available information, the government plans to introduce a staggering gaming revenue tax of 50%, which could seriously hurt the operations of leading gaming companies in the country.

Taxes Are Set To Go Up

Japan’s ruling party and its coalition partner want to include specific tax rates into the Integrated Resorts Implementation Bill, which is set to reach the country’s lawmakers during the current legislative session.

The sources say the government plans a 30% tax rate on annual revenue up to $2.8 billion, a 40% tax rate on revenue ranging from $2.8 to $3.7 billion, while those operators grossing more than $3.7 billion on a yearly basis will have to a pay a 50% tax rate.

Although some market analysts claim the extremely high tax rates are intended to provide funds for those initiative aimed at promoting responsible gaming, but many believe the rates will discourage potential casino licensees.

Morgan Stanley analysts share this opinion, saying that lower return on invested capital could easily scare off eventual investors.

Government Plans Additional Restrictive Measures

Unfortunately, that’s not the only problem potential operators could be facing on the Japanese market. The government also plans to limit the number of visits residents can make on a weekly and monthly basis. If this plan goes through,  local residents will be entitled to 3 casinos visits per week, and 10 within a 28-day period. In addition to this, the government wants to impose a casino entry levy, which is a common practice in Singapore, and restrict the possibility of gambling on credit.

The country has restricted the total size of any resort’s casino floor to a maximum of 3% of the resort’s area, but not exceeding 15,000 square meters (more similarities with Singapore), which is another factor that may discourage operators from entering the local market.

The current legislative session of the National Diet will end on June 20. The adoption of the Integrated Resorts Implementation Bill should be completed by then, although many believe a separate legislation will be introduced to limit the casinos’ impact on the Japanese society.

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