Spring is coming to Japan, but apparently, it won't be the time that the country's ongoing integrated resorts legalization process will reach its full bloom.

Lawmakers likely to take up Japan IR bill during fall special sessionAfter talking with a member of Japan's House of Representatives who is involved with the in-process IR legislation, analysts at brokerage Union Gaming Securities Asia Ltd. believe there won't be any movement during the Diet's spring session.

"Rather, we think the Diet has already made the decision to handle the IR bill during the fall special session, suggesting that it is more likely going to be an October or November event," Union Gaming analyst Grant Govertsen said in a note.

Japan already passed the first legislation—the so-called "enabling" bill—last December that will pave the way to make casino gambling legal, and if all goes well, the country may see the opening of new casinos by year 2023. But even before Japanese lawmakers can lay down the ground rules for the opening of casinos, international operators are scrambling to find local partners and venue hosts in the island nation.

A key focus for the secondary legislation will be to drive foreign tourism to the country a la Singapore, and proponents of the bill are hoping Japanese companies will be partners in every IR project that will be approved.

Japan may greenlight two to three casinos, with locations and operators chosen by 2019, but at the moment, how licenses will be awarded remains up in the air.

"We think the most likely scenario is a dual RFP [request for proposal] process: a geographic RFP followed by a developer RFP. However, there could be a scenario where cities link up with a consortium and they bid jointly in a single streamlined RFP process against other cities+consortiums," Govertsen said.

One regional contender for the IR license is pachinko hall operator Dynam Japan Holdings Co Ltd., especially if such license is available in the Yamaguchi prefecture, where the company has "very strong ties."

"Dynam intends to be a participant in any upcoming RFP process as it relates to a regional (e.g. smaller-scale) IR, especially in Yamaguchi prefecture," Govertsen said. "We believe there is unrealized value in shares of Dynam as it relates to the IR opportunity. Not only as a likely front-runner for a regional license but from the standpoint of being an ideal candidate for strategic investment by an international developer who needs to better understand the locals market."

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