Explainer: Bribery scandal casts shadow on Japan’s big casino gamble

Thursday 26th December 2019

TOKYO (Reuters) - Japanese prosecutors have arrested a ruling-party lawmaker previously in charge of casino policy on suspicion he accepted bribes from a company seeking to build a casino.

The arrest of a member of Prime Minister Shinzo Abe's Liberal Democratic Party is likely to harden public opposition to the unpopular plan to allow casinos in the world's third-largest economy.

The following are some key points about the scandal and its implication:

Tokyo prosecutors arrested Tsukasa Akimoto on Wednesday on suspicion of accepting bribes from employees of a company that wanted to set up a casino in Japan.

Akimoto was up to last year a senior vice minister in the Cabinet Office who oversaw policy on casinos.

He is suspected of taking 3 million yen cash ($27,500) and a family holiday valued at $6,500 from three suspects despite knowing their company wanted help with a casino, prosecutors said. The three were also arrested.

Akimoto has denied wrongdoing.

Prosecutors did not name the company, but public broadcaster NHK and other Japanese media say it is Shenzhen, China-based 500.com. The online gambling firm had indicated interest in opening a casino in Japan, the Nikkei and other media reported.

New York-listed 500.Com has not responded to requests for comment.

The arrest is likely to be seen as another black mark against casinos, still a contentious issue after lawmakers last year finished legalizing them following years of debate.

Japan wants to allow several "integrated resorts", Las Vegas-style complexes that include casinos, shopping arcades and conference centers.

Hamstrung by a shrinking economy, population and tax base, Japan is pushing to boost overseas tourism, especially after the Tokyo Olympics end next year.

Some analysts say the casino market could be worth around $20 billion annually or more, thanks to an affluent population and the proximity to Asia's wealthy gamblers.

The casino development law is unpopular with the public, given concerns large-scale gambling centers could lead to a rise in addiction, along with crime and corruption.

An opinion poll in October by Jiji news found 57.9% opposition to integrated resorts versus 26.6% support.

Gambling has a seedy image in Japan, with none of the glamor associated with spots like Las Vegas. Many Japanese identify gambling with the noisy, garishly lit pachinko pinball parlors that dot neighborhood shopping streets.

Many are skeptical of the benefits and argue it would create mostly part-time and low paid jobs.

The government's chief spokesman, Yoshihide Suga, said Akimoto's arrest would not impact the process to select casino host cities.

Given Akimoto is no longer a member of the cabinet office, analysts say his arrest is unlikely to weigh on the process.

"If this involved a prominent politician, it would be an enormous problem, but you can't say he's that prominent, so the impact won't be that large," said Tomoaki Iwai, political science professor at Nihon University.

But Iwai said the scandal had worsened the image of the Liberal Democratic Party, which is also fending off allegations that Abe used party funds to sponsor a party for supporters.

The government has authorized licenses to build three resorts, and is expected to officially receive bids from interested localities in 2021.

Potential bidders include Tokyo, Yokohama and Osaka, Japan's three largest cities, and smaller ones including Nagasaki and Wakayama. Hokkaido had expressed an interest, but bowed out last month.

MGM Resorts International has indicated its intention to develop a casino resort in Osaka.

Other global names including Las Vegas Sands Corp, Wynn Resorts Ltd, and Galaxy Entertainment Group have indicated a preference to build in Yokohama.

Caesars Entertainment has said it will not pursue a license.

(Reporting by Naomi Tajitsu and David Dolan; additional reporting by Daniel Leussink; Editing by Himani Sarkar)

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