* Enabling legislation for casino resorts passed on Friday
* Clear rules will embolden Japanese firms to participate -sources
* Few domestic firms have stepped up amid public opposition
By Thomas Wilson
TOKYO, July 20 (Reuters) - Japanese firms are likely to pursue stakes in the country’s first casino resorts, after parliament on Friday enacted a law smoothing the way for large-scale gambling - a business expected to generate billions of dollars in revenue.
Japan legalised casinos in 2016 but a further law was needed to lay out specific regulations before these resorts - complexes hosting casinos, retail and conference space - could be set up.
The new law, which allows three licences to be given out initially, calls for a 30 percent tax on gambling revenue and caps casino space at 3 percent of total resort size, provides the clarity that was missing.
It will embolden local companies that have been wary of a sector that the Japanese public associates with addiction and crime, setting the stage for a race for stakes, casino executives and lobbyists told Reuters.
The prize for Japan Inc is clear: these resorts will earn up to $25 billion in revenue, analysts say, representing a rare chance of growth for domestic firms that have been bruised by decades of deflation and weak demand.
Various Japanese firms spanning sectors from finance, real state to construction and tourism will target equity stakes in consortia with casino operators, the sources added.
While no Japanese company has announced any plans yet, firms regularly cited by lobbyists as seeking participation include Obayashi Corp, Mitsubishi Estate Co and Sumitomo Mitsui Financial Group Inc (SMFG).
A spokesman for Obayashi, which in May set up a team to explore casino resorts, said the firm had not decided whether to seek equity in any project. Mitsubishi Estate said the chances of it taking a stake were low but involvement in related real estate projects was possible.
A spokesman for SMFG’s banking unit said the firm was not considering investing in a resort, but was speaking to foreign operators as it researched the sector.
International casino operators looking to enter Japan include Las Vegas Sands Corp, MGM Resorts International and Macau’s Galaxy Entertainment Group.
“There is going to be greater focus, greater attention, more budget and more human capital put on this,” said George Tanasijevich, managing director of global development at Las Vegas Sands. “You’ll see more activity, to the point that people are going to start to formulate their true options, and what their shareholders would see as favourable.”
But even as Prime Minister Shinzo Abe personally champions the creation of a casino industry, Japanese firms have stayed away, reluctant to be the first mover in a controversial sector.
A government survey last year showed some 3.6 percent of Japanese, or 3.2 million people, had been hooked on gambling - often “pachinko” pinball - at some point in their lives.
A Jiji news agency poll shows over six in ten Japanese are opposed to the latest casino law.
“Large firms don’t want to put their neck out before others,” said Lance Miller, country managing partner at law firm DLA Piper in Tokyo.
Still, some companies have already set out their stall.
Slot machine maker Sega Sammy Holdings Inc, which controls 45 percent of a South Korean resort, has said it will seek a majority stake in any Japanese project.
Of potential locations, Osaka is seen as a frontrunner.
The city of 2.7 million boasting strong local political support for casinos is expected to become the first to request proposals for plans in late 2019.
“Osaka is the only location where everything is clear: it will move forward immediately,” said Seth Sulkin, chairman of the integrated resorts task force run by the American Chamber of Commerce in Japan. (Reporting by Thomas Wilson; Editing by Himani Sarkar)