Gambling Issue in Japan - Essay Example

Gambling in Japan Gambling has been a common culture in form of betting in Japan since the olden days. Although, in earlier days the presence of casinos was hardly there; other betting activities such as horse racing, boat and bicycle racing, lottery, Toto, mahjong and even pachinko were common amongst Japanese. With around more than 4000 casinos worldwide, they currently are illegal in Japan; however, the prospect of having casinos established in Japan is not as alien as some people might think it is. Casinos are just a place located in hotels, restaurants, tourist spots and even cruises that accommodate all the gambling activities under one roof. Casinos are not virtual in Japan but this is the country that originated some of the famous game such as keno; online gaming facilitates this game service (Hurley, 2008). Q1) The governor of the ultra right-wing Shintaro Ishihara of the Japanese government has been trying to make casinos legal in Japan (Yang, 2006). If he becomes successful, Japanese can themselves invest in such casinos and form wholly-owned casinos of their own. However, keeping the current dilemma of the Japanese government of legalizing casinos in mind, it is easy to conclude that no Japanese will be ready to invest all his capital in such a risky business. Considering the fact that Japan is a big market for casinos, especially in Tokyo and Osaka, the US based gaming company called 'The Gamblers' has decided to accept the jeopardy and plough a large sum of money into casinos in Japan. The company initially had franchising in mind; but after assessing that no Japanese was ready to become the franchisee due to the risk involved, The Gamblers had to drop the plan. It was then finally decided to form a subsidiary in Japan. Since, The Gamblers will form a subsidiary from the scratch; this investment is technically called a Greenfield venture. The advantage of this type of an investment is that The Gamblers can have whatever culture it wishes; it will keep the same structure as that of US's and when everything is run the way we wish, high profitability is likely to occur. However, there are disadvantages attached to this too - The Gamblers will have to study the Japanese market in great depth, will need to acquire information about the market, laborers, materials, people and culture; mistakes are inevitable. The best part remains; the US Gambler will have total control over the activities. However, it was decided by the US top level management of The Gamblers that later on if any Japanese would be interested in buying shares/investing and gaining some control over the casino, US management will be open to that. It is anticipated that Japanese will be interested in investing in the casino as it will be an innovative area with a big market to invest in. Q2) For a fact, the market demand for casinos in Japan is extremely high. Not only people but some government officials such as Ishihara are working for the legalization of casinos. According to a news article in Singapore, the Japanese gaming adviser has held talks with global casino owners such as Las Vegas Sands and Harrah's Entertainment to become Japan's first ever casino. Japan chose Las Vegas Sands because it has made an investment in Singapore too; however, it is The Gambler's aim to make sure that they become the first ever legal global casino. The Japanese market is definitely lucrative because not only is the public in favor, but even the government is inclined towards lifting the ban. The government has a tourist perspective in mind - casinos usually attract the tourist influx, causing a rise in foreign exchange earnings. Apart from the tourists, there are about 128 million people who are ready to spend money on this form of entertainment. According to a survey to find out whether people support the ban lift of casinos in Tokyo, out of a sample of 13,236 people, 32.4% supported the legalization, 21.0% opposed it, 44.9% did not know and 1.8% did not answer (Ken Y-N, 2007). With the highest per capita income in Asia of $39,195 which even exceeds USA's according to Bloomberg data, profits can definitely be foresighted in this area of business in Japan as the people themselves favor the idea. However, there is always a flip side to every situation - what about the 21.0% who oppose the idea of casinos Due to the strict illegalization of casinos throughout Japan, there is a major risk of governmental forceful shut down of The Gamblers. Despite that, naturally there have been some small illegal casinos running such as the Shimbashi casinos. The owner is the Shimbashi casino has stated that the police bust such a place once a week, so it is calculated that at this rate, every casino will have to shut after a year or two and then look for a new location. There are current target market areas in Tokyo such as Shibuya, Shinjuku, Ikebukero, and Roppongi areas with the highest concentration of casinos since they are frequently visited by business men (Bull, N.D). However, the police is strict about these areas more than the others due to the illegalization; thus, the risk of investment is quite high. Q3) Command and control structure originated from the military set up, where the biggest danger of the soldier was his officer. This management system basically means that you instruct your subordinates to do whatever that they are supposed to and if they do not follow, you punish them - this is kind of an authoritarian rule. However, it is difficult for a few managers to supervise each and every employee working under them and making sure they complete the goals assigned. Therefore, the system that The Gamblers plan to use is the Gold Silver Bronze Command and Control. Primarily, this system was designed for emergency purposes but The Gamblers have bent it a little to fit the casino management. Gold is basically the top most rank in the hierarchy including the CEO, Chairmen and directors who make all the strategies based on which the casino runs, such as starting up the business; forming its structure deciding upon the company culture; corporate values; approving marketing, operating, financing and HR decisions. In case of the Gamblers these people are the ones who work within America, taking decisions and overseeing the Japanese activities. The CEO expects the silver managers who are administered in the Japan headquarters to take care of all the tactical part - where to locate the casino, how to market the casino, what packages to use to attract customers, creating marketing strategies, keeping track of finances, hiring and firing employees, supervising the employees working on technical manufacturing etc. The workers on the bronze level are those doing operational work such as the waiters serving drinks and facilitators plus cashiers at the casino itself. This type of management is suitable for The Gamblers as the US management needs to be informed of the failures, successes and mostly importantly progress of the Japanese casino. Also, this management system as was initially formed for emergency incidents is good for casinos as the raids that can take place in case of illegal activity is an emergency itself; thus, The Gamblers will know how to tackle this situation. Q4) There are two sides to the answer. If the casino is illegal, then a low-profile, small scale casino should be started. The reason is that it will not come into sudden notice, and if the government bans or police raids the casino, at least the amount of loss made will be limited. If The Gamblers are not willing to bear the losses, they should not invest to begin with and choose another country as their market. On the other side, if the casino is legal, then a very flashy, extremely high class casino should be opened in the most elite hotel of the major cities such as Tokyo and Osaka. Not only will become aware of the existence, but the elite social class will become the first customers since they really concentrate on maintaining their standard of high reputation and monetary worth. However, there should be an average- scale branch independent of any hotel should be established for medium class people who can afford this source of entertainment. Considering the sum of people who are ready to do so, Japan is a very lucrative market for the establishment of a casino. News suggests that the governors themselves are compelling the government to lift the ban; there is a very good chance that the government will actually be convinced. Plus, The Gamblers is a very big corporation who are willing to take the risk of investing with the motive of profit. Therefore, it is suitable for them to have started planning as they have finally decided to take a chance and avail this opportunity. References 1. Huiwen Yang, 2006, Casinos start talks with Japan - Harrah's and Sands vie for first license. Accessed on September 1, 2008 from http://www.iht.com/articles/2006/07/25/bloomberg/sxcasino.php 2. Brett Bull, (N.D), A Casino Grows in Tokyo. Accessed on September 1, 2008 from http://www.pripix.com/captain/casino.htm 3. Ken Y-N, 2007, Gambling in Japan. Accessed on September 1, 2008 from http://whatjapanthinks.com/2007/08/01/gambling-in-japan-2/ 4. D. P. Hurley, 2008, Gambling In Japan And The Development Of The Japanese Hanafuda "Flower Card" Deck. Accessed on September 1, 2008 from http://ezinearticles.com/Gambling-In-Japan-And-The-Development-Of-The-Japanese-Hanafuda-Flower-Card-Deck&id=927187 Read More