Japan: The impossible happens

Just when even Wall Street analysts were giving up hope — and ahead of schedule — Japanese Prime Minister Shinzo Abe got a casino-legalization bill through the Diet. This Diet_of_Japan-e1401350602863isn’t the end of the process, although casinos are now legal, more like a promising first step. The parliament still has to reconvene and enact a second law setting forth the regulatory apparatus whereby Japanese casinos will be governed. Also remaining to be addressed are how many casinos will be built and where they will go. Conventional wisdom holds that there will be megaresorts in Tokyo and Osaka, plus the potential for smaller ones in cities like Hokkaido. For now, there will probably be a stampede of lobbyists from the usual suspects (led by Las Vegas Sands and MGM Resorts International), as well as by favorite-son candidate Sega Sammy and Kazuo Okada‘s Universal Entertainment, not to mention late entrant Hard Rock International. Estimates of the revenue potential of the Nipponese gambling market are as high as $40 billion a year and as conservative as $7 billion — hardly chicken feed. Although Abe has raised and dashed our hopes many times before, he deserves props for getting the job done this time.

* Thanks to the potential of a Faraday Future electric-car plant in North Las Vegas, Boyd Gaming went all in earlier this year, purchasing both Aliante Casino and The Cannery. It might have buyer’s remorse if warnings by Nevada Treasurer Dan Schwartz bear fruit. Schwartz cautions that Faraday’s cash flow is currently dependent on owner Jia Yuting and his Leshi company: “As the entire world seems to know, the news from both is not good,” said Schwartz, who calls the whole sandoval_t178enterprise a Ponzi scheme. He further criticized Gov. Brian Sandoval (R, left) and Mayor John Lee (D) for the economic incentives they provided, although Lee replied that sufficient safeguards are in place and that Schwartz just doesn’t know what he’s talking about. “Although the treasurer appears to expect failure, I have always planned for success,” Sandoval said. He added that the incentives were contingent upon $1 billion in Chinese capital being invested and in the posting of a security bond. Let’s hope for everyone concerned that Faraday Future comes through. In the meantime, inception of nonstop flights from Beijing to Las Vegas is expected to bring a steady stream of smaller investments. Already architect Ed Vance is angling for a piece of the action, calling for a revamp of Chinatown, which could see expansion. LVA headquarters is on the fringe of Chinatown and we hope that an influx of new capital doesn’t eradicate its charm.

* Ten years ago, the international Financial Action Task Force evaluated the casino industry’s compliance with anti-moon-laundering rules and concluded, “Regulators and casinos should work to further harmonize the Nevada Gaming Commission’s (NGC) regulatory requirements with the Bank Secrecy Act (BSA) and that this should occur as Geoff-Freemanrapidly as possible.” Move the clock forward to 2016 and the FATF’s verdict is that “the gaming industry has taken significant steps … Casinos have not only increased their compliance spending but have put in place mitigating requirements above the requirements of the BSA.” (Emphasis added.)

The American Gaming Association was quick to hail the news, with President Geoff Freeman saying, “We’re proud of the incredible strides not only since FATF’s report of the gaming industry ten years ago, but in the last three years as we’ve built a partnership with the federal government that serves as a model for other industries.” Why then is Freeman jawboning for a rollback of FinCEN enforcement? Perhaps a clue lies in the AGA press release, which quotes former FinCEN Director Jennifer Shasky-Calvery telling industry leaders, “I hope that together we can make a cultural [AML] change.” Safety the AGA, “Today’s report offers the latest evidence that such a change has indeed occurred,” as though the AML issue is now moot and no additional vigilance on that battlefront is required.

* My fellow Americans, your prayers have been answered. There’s a Donald Trump Christmas ornament. It costs you only $250 and is fugly as heck.

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