The Central Government of Japan recently rejected Nagasaki's Las Vegas-style casino-centered integrated resort proposal citing uncertainty over the feasibility of financing the project. The plan for the Nagasaki IR project had been under review since April last year, alongside a similar gambling-friendly project in Osaka, which represents the country’s first integrated casino-resort. The proposed project for the Nagasaki prefecture aimed to establish an IR by 2027. Under the proposed project, the IR would be established at the 31-hectare plot of Huis Ten Bosch, a theme park in the Sasebo area of the prefecture. The envisioned IR included multiple luxurious hotels, an exhibition hall of international level, a state-of-the-art casino, and a number of commercial facilities, with an expected annual attraction of 8.4 million guests and an income of around $2.3 billion to the southwestern region of Japan.

Unfortunately, the Japanese Ministry of Land, Infrastructure, Transport & Tourism recently rejected the proposal. The main reason cited by the ministry for the rejection was doubts and uncertainties over the feasibility of financing the ambitious project.

Nagasaki planned to cover 60 per cent of the initial investment of approximately $3.1 billion through credit from financial institutions. However, the proposed project faced financial uncertainty as Credit Suisse, a Swiss financial giant involved in funding the project, suffered a management crisis and it was eventually acquired by UBS Group AG. This change, coupled with the challenges of obtaining government approvals and licensing, contributed to the uncertainties over the project's financial viability.

The decision-making process for government endorsement involves an expert committee under the aforementioned ministry. The committee assesses the project’s ability to attract foreign tourists, and its economic benefits. Securing a license is a crucial for opening a casino in the Asian nation.

In contrast to Nagasaki's challenges, Osaka's IR project on Yumeshima, a reclaimed island in Osaka Bay, was approved by the Japanese government in April this year. The Osaka IR will feature multiple hotels, a big museum, a massive shopping mall, a conference center, a ferry terminal, and a helicopter pad for high-rollers. Projected to attract roughly 20 million guests per annum, it aims to generate $10.3 billion in revenue to the region. The overall cost of the project is estimated at $11.5 billion, with plans for the IR to open its doors to the public sometime in 2030.