Japan could finally pass a long-awaited bill with the potential to transform the country into an international gaming destination, providing a fillip for the stumbling economy.
Gambling is officially illegal in the world's third-largest economy but the betting culture is widespread, most visibly reflected in the pachinko halls—arcade-style outlets where players can win money depending on the games' outcome—that dot city streets.
Now, after years of being sidelined, a bill to introduce integrated resorts (IRs), with hotels, casinos, malls and other entertainment facilities, stands a chance of being debated in parliament before year-end.
"This time, it's 100 percent happening," Kotaro Tamura, a Milken Institute fellow, told CNBC's The Rundown.
The government's increased political capital and its goal of boosting inbound tourism are two key factors that distinguish this push from previous years, explained Tamura, a former senator and parliamentary secretary for economic and fiscal policy at Japan's Cabinet Office.
Three pro-casino officials were promoted to top spots when Prime Minister Shinzo Abe reshuffled the ruling Liberal Democratic Party (LDP) in August.
Toshihiro Nikai was appointed secretary-general, Hiroyuki Hosoda became General Council chairman and Toshimitsu Motegi was named policy chief. The three reportedly held a meeting Thursday in which they confirmed their intention to have the bill passed during the current parliamentary session, which ends on Nov. 30.
The bill was first submitted to parliament in 2013 but got scrapped the following year after an unrelated political scandal forced to the House of Representatives to dissolve. The bill was resubmitted last year but did not advance as the opposition and public were fiercely against it, citing fears of an increase in gambling addiction.
A 2014 government survey indicated 5 percent of the adult population, or 5 million people, suffered from the compulsive habit—considerably higher than the average 1 percent figure in other advanced economies.
Abe has openly supported the IR concept. In 2014, he called the developments a "key part of Japan's economic growth strategy" but had previously lacked the political clout to make progress on the matter. But now that the LDP has an overall majority across upper and lower houses of parliament, it can effectively guarantee the bill's passage when it comes to a vote.
Analysts have also noted that the timing was now right for the bill to be considered, given that Abe's previously busy legislative calendar was free, following a controversial security bill and parliamentary elections earlier this year.
As a result, LDP General Council chair Hosoda told Reuters last week that there was a near-certainty the bill would be debated in the current parliamentary session.
Steven Gallaway, managing partner at Global Market Advisors, said the chances of success were higher this time around because international companies with experience in conducting responsible gaming had been working to educate Japanese legislators and stakeholders on the benefits of casinos.
Japanese voters remain largely ill-informed about IRs, Grant Govertsen, co-founder of investment bank Union Gaming, agreed.
"If the public were to understand that there would only be a couple, or a few, casinos and that they would be massive entertainment destinations that extend well beyond gambling, there would be a favourable opinion," he said.
And the potential economic advantages could be massive. IRs could inject $40 billion a year into the economy, which is currently weighed down by weak consumption and spending, according to CLSA data. Not only would the economy from a new source of job creation and tax revenue, but legalized casinos would help Japan reach its goal of attracting 20 million visitors a year by 2020.
If approved, Japan's casino trajectory is likely to follow that of Singapore, where just two IRs have propelled the Southeast Asian nation onto the global gaming stage.
"While I don't ever see Japan becoming the next Macau or Las Vegas, it could likely become the next Singapore," Gallaway said. "Both countries are politically and economically stable, have diverse levels of international tourism, and are geographically on opposite sides of Asia."
Singapore also faced similar fears on gambling addiction, a concern that the government addressed by implementing an entry fee for locals to deter low-income individuals from gambling.
But unlike Singapore, VIP gamblers would only comprise a minority of revenues at a Japanese IR, according to Gallaway. He said Japanese IRs would likely be heavily weighted towards the mass market instead.
Only two IRS are expected at first, most likely in Tokyo and Osaka, but that would still be enough for Japan to quickly overtake Singapore as a gambling hub, according to Govertsen.
"We believe that two IRs in Japan would quickly surpass the revenue story in Singapore, which in turn would make Japan the second largest gaming market in the world behind Macau," he said.