by Noriyuki Morimoto
It looks like casinos are finally becoming legal in Japan.
Casino legalization is a controversial issue with strong arguments on both sides. Supporters argue that developing integrated resort (IR) facilities including casinos would become one of the pillars in Japan’s growth strategy, as it will generate large consumption demand, particularly by increasing inbound visitors. On the other hand, opponents point to social problems such as gambling addiction.
Gambling can cause outcomes that run against customers’ benefits, such as addiction and loss of huge amounts of money. Therefore, it is a crime. But even when the act is a crime, if there is a social benefit like financing local governments through public gambling, special laws can be made to decriminalize the act. With the same reasoning, casino legalization is being discussed.
The assumption in legalization of gambling is that it produces remarkably high customer satisfaction. That is the source of strong demand, and supporters are attempting to realize social benefits by using that demand. Similar things can be said for tobacco and liquor: considering their health impacts, we cannot deny their aspect of running against customers’ real gains, but there exists a very strong demand based on customer satisfaction. Therefore, they can sell even when high tax rates are imposed, which in turn creates a stream of tax revenue.
In addition, it is extremely difficult to distinguish between fraud and fraud-like activities. For example, if you believe that a duvet is being sold at a price significantly exceeding its real value, even if you suspect it to be a fraud, there is nothing to be done if the person who purchased it believes the product is high quality because it is expensive. Such shady schemes also work based on their creation of high customer satisfaction.
Also, in areas that support modern consumption, such as fashion, food and drinks, entertainment, and so forth, customer satisfaction is formed at a level that far exceeds their critical functions and bare necessities of clothing, shelter and living. Put bluntly, the pathology of wasteful overconsumption has become a driving force for economic growth.
However, there are also established areas in this ailing modern society where it is crucial to consider the customers’ true benefit based on necessity, even against customer satisfaction. These are regulated industries including medicine, education, and finance.
Chief Executive Officer, HC Asset Management Co.,Ltd. Noriyuki Morimoto founded HC Asset Management in November 2002. As a pioneer investment consultant in Japan, he established the investment consulting business of Watson Wyatt K.K. (now Willis Towers Watson) in 1990.