Japan’s ambitious plan to launch a second bidding round for integrated resorts in 2027 is encountering significant headwinds before it has even officially opened. Industry analysts are questioning whether the country will attract enough credible operators to deliver the two additional licenses the government hopes to award. Development costs and uncertain site selection are emerging as major deterrents.

Scott Fisher, co-founder of Convergence Strategy Group, has issued a detailed assessment highlighting the structural challenges facing the upcoming window. Revenue projections remain attractive enough to keep mid-tier and large-scale operators engaged, granted. But Fisher notes that Japan’s cost profile now rivals the most expensive markets in Asia. Combined with lingering questions over where new resorts could actually be built, the second round may struggle to replicate the competitive interest the government initially anticipated.

Two Prefectures, No Confirmed Sites

The application window is scheduled to run from May to November 2027. Only two prefectures have publicly expressed interest so far: Hokkaido and Aichi. Neither has finalised a development site, and both remain in early feasibility studies.

That leaves the national selection process facing considerable uncertainty over not just the number of bids it will receive, but their viability.

Hokkaido, where Hard Rock International is widely seen as the front-runner for private-sector partnership, offers strategic advantages as a winter tourism destination. Its geographic isolation from Japan’s major urban centres reduces direct competition from rival IRs, but that same remoteness creates its own problem. Any resort there would depend heavily on a limited local population and a visitor base vulnerable to sharp seasonal fluctuations.

The prefecture is once again examining Tomakomai, the site it considered but ultimately abandoned during the first bidding round. Environmental concerns over protected wildlife derailed that initial effort, and the prefecture ran out of time to complete a full environmental impact assessment before the application deadline. This time around, Hokkaido is also looking at alternative locations, including a site at Lake Akan near the city of Kushiro. Fisher suggests that option may bring its own environmental complications. The prefecture doesn’t have a straightforward path forward.

Aichi’s Infrastructure Gamble

Aichi Prefecture is exploring a site near Chubu Centrair Airport in Tokoname, but the project hinges on infrastructure that will not materialise for years. The prefecture sat out the first application round, a decision Fisher now believes was prudent given the repeated delays to Japan’s planned maglev rail link between Tokyo, Nagoya and Osaka.

Originally targeted for 2027, the maglev is now expected to reach Tokyo no earlier than 2035 and Osaka by 2037. Once operational, it will cut travel times to approximately 40 minutes from Tokyo and 67 minutes from Osaka, transforming the economics of an airport-adjacent IR. Without it, however, the location faces significant disadvantages. The airport sits roughly 40 minutes south of Nagoya, a city that does not currently feature prominently on tourist itineraries. There are no major attractions in the immediate vicinity.

The proposed development parcel itself presents further constraints. Fisher describes it as limited in both shape and scale, with likely height restrictions due to its proximity to the runway. Existing infrastructure could support relatively fast construction, to be fair, and the region offers access to a substantial domestic and international customer base in the long term. But the site may be better suited to a third application round once the maglev is operational.

Learning Curve and Shrinking Alternatives

Despite these obstacles, Fisher argues there are still rational reasons for operators to participate in 2027. MGM’s Osaka IR, expected to open around 2030, will enjoy a multi-year monopoly as Japan’s only licensed integrated resort. For second-wave bidders, that creates an opportunity to observe Japanese consumer behaviour in real time before committing capital. Operators will be able to study game mix preferences, floor layout efficiency and the practical impact of Japan’s strict gaming regulations. They can potentially avoid costly mistakes that could undermine early-stage profitability.

There is also the broader question of where else major operators can deploy capital in Asia. Thailand’s IR prospects have stalled again. The Philippines market is increasingly saturated. Vietnam has failed to attract significant Western interest, and South Korea’s foreigner-only casinos have delivered underwhelming returns. Macau offers no realistic expansion opportunities in the near term. Against that backdrop, Japan remains one of the few viable markets for large-scale greenfield development, even if the path to profitability is more complex than initially anticipated.

The critical questions now are straightforward: how many credible bids will materialise by late 2027, where they will be located, and whether the economics can support the development costs required to meet Japan’s demanding standards. The answers will determine whether the second round delivers the competition and investment the government is counting on, or whether Japan’s IR expansion stalls after Osaka.

What the team thinks

Carl Mitchell says:

Japan’s dragging their feet on this one, and I can’t say I blame operators for being hesitant when the first round took years to get off the ground and Osaka’s still building. From a player’s perspective though, if they actually manage to get two quality IRs up by the early 2030s, it’ll create proper competition that should benefit punters with better comps and gaming options, assuming they don’t regulate the fun out of it first.