The Japanese government is nipping the casino industry’s full potential in the bud with its restrictive regulatory framework even before it blooms, a financial analyst warned.

“Snatching defeat from the jaws of victory” was how Grant Govertsen of Union Gaming Securities Asia Ltd. described Japan’s newly crafted Integrated Resorts bill, which he thinks would place burden on potential casino investors.

In his Monday note, Govertsen noted that the framework is becoming “more restrictive by the day” that it might become worse than the failed gaming expansions of Korea and Vietnam.

“Japan is on the verge of one-upping the failed gaming expansions of Korea and Vietnam by moving forward with a gaming construct that [it] can’t fulfill the #1 stated goal of Japan’s IR development – tourism growth, and [it] is so poorly designed that ROIs shrink to a level that makes participation on the part of the global IR developers much less likely,” Govertsen warned.