The Japanese "Diet", the joint legislative session that decides on new bills to be passed,
hopefully prepared to make a quick decision on this one. Photo: Wikicommons

According to reports by BusinessWeek and other sources, discussions will start this Wednesday morningĀ (June 18) to begin hashing out the bill that would allow gambling in Japan. The long-awaited talks, which have been anticipated to pass during this current summer legislative session ending June 22, has been repeatedly put off behind other pressing topics for the Japanese lawmakers.

Investors have been long waiting for Japan to pass legislation to allow gambling, which is currently forbidden in the country. Casino companies like Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), and Melco Crown (NASDAQ:MLCO) are all set to win big from the coming Japanese gaming market, which is estimated could be a $40 billion industry by 2020.

Japan P.M. Abe at a conference in Singapore, where he lauded on the benefits of casinos in Japan. Photo: AP

Impossible to pass this session?
The bill itself holds multi-party support, including that of the prime minister of Japan, Shinzo Abe. It seems everyone is anxious for this bill to pass already. The fact that the discussions for this bill are starting during the current summer session is exciting news.

However for investors hoping for a quick pass this session, think again. The bill will open for debate in the Lower House first, but requires more discussion before it can move to the Upper House for a chance to pass by the June 22nd end of this session. Getting the required delegation completed to a successful vote just isn't likely to happen that fast.

One Japanese lawmaker, Hiroyuki Hosoda, said that the bill will not be passed before the end of the current session on June 22, and will be taken up again when the Diet resumes in autumn. And that, my Foolish readers, is what matters.

Why this is still a good bet
Japan is anticipated as the next major gaming hub of Asia thanks to its wealthy population who already love gambling. Las Vegas Sands, Wynn Resorts, and Melco Crown have each decided to invest billions in the country when allowed.

But will the legislation pass? For the short term, this might seem like too risky of a bet, centered on the hope that government will take certain action, which is never a sure thing. In the short term, especially for this current summer session, this is a risky bet.

Tokyo's winning bid for the 2020 Summer Olympics could be a win for casino companies as well as Japan looks for a way to pay for the games. Photo: Japan Times

But long-term odds are still highly in favor of the bill eventually passing. Full support from the prime minister, support in both parties of the Japanese legislature, and the looming challenge of funding the 2020 Olympics in Tokyo all support that the bill will pass. The earlier you are to catch on to this, the more money you can make by being ahead of this new market.

The bill will eventually pass, Where should you place your bet?
As long-term investors, it's important to believe that Japanese gaming legislation eventually will pass. When it does pass, Foolish investors will want to have bet on the right company.

Melco Crown and Wynn are two companies already showing how willing they are to get in on this new market. Wynn Resorts already gets 75% of its global revenue from Asia and is hoping to increase that further with a bet on Japan. Wynn executive Matt Maddox recently said that "Japan is known for hospitality, high quality and precision. The culture of almost perfection here fits very well with Wynn and its details-oriented focus. That would allow Wynn to be a strong contender in the Japanese market."

Likewise, Melco Crown gets 100% of its revenue from Asia, as it is a Chinese company. Melco Crown's rapid expansion in Macau, as well as the company's first non-Macau casino to open in Manila, Philippines next quarter, and investment in a casino in East Russia show that the company is currently very focused on continued expansion. Company CEO Lawrence Ho has already been talking with Japanese officials making potential plans for his company's casino bid in Japan.

However, Las Vegas Sands is probably the best bet so far. CEO Sheldon Adelson has said that he would be willing to invest $10 billion in Japan if needed, and the company has the reserves to do just that. But its the company's track record of working with Asian governments that makes it more impressive.

Japanese lawmakers, as well as Prime Minister Abe, have already used Singapore as a model of how they want casinos to operate in Japan. Sands is the only U.S. casino company that was able to win a bid in Singapore, out of the many that tried including Wynn Resorts. When Prime Minister Abe recently visited Singapore, he visited its Marina Bay Sands resort. With its clear track record of successfully expanding in Asia, Sands is probably the company to back in the race for Japan as well.

Sands Singapore resort, Marina Bay Sands is everything Japanese law makers
want a Japanese resort to be. Photo: Las Vegas Sands

Foolish takeaway: Waiting for the government, is that a good idea?
Japanese prime minister Shinzo Abe, who was previously quiet on the topic, has stated that he thinks that casinos could be a new pillar of economic growth for Japan, helping the economy recover to its pre-crisis levels. In the Japanese Diet (congress) itself, the bill has multiparty support. All the bill lacks is delegation time.

With all of this support for the bill, its highly likely that the bill will eventually pass. Starting discussions this current summer session, even if the bill itself isn't passed by June 22, is a good indicator that a bet on Japanese gaming will likely pay off for long term investors, hopefully as early as the autumn parliament session. And when it does, Foolish investors will want to make sure that they are making the right bet.