MGM Resorts International is currently going through an interesting period related to a lot of development and changes. During a presentation in Tokyo, Japan which took place recently James Murren, Chairman of the US-based casino operator, said that the next partnership of the company will be with a Japanese consortium.
It is no secret that the leading casino operator has been eyeing the opportunity to build an integrated resort in Japan for quite some time. This Thursday the company had a briefing at the Bank of America Merrill Lynch 2017 Japan Conference when it became known that the launch date of the said integrated resort could be postponed to the year 2025. This partnership is aiming to branch out the business of MGM Resorts and explore new markets, such as the one in Japan which is at its initial stages of development. Mr. Murren said that the company is looking forward to partnering with Japanese companies and creating a prosperous project.
The Chairman of MGM Resorts also added that in 2018 the government is expected to pick an appropriate business-operator partner to join MGM in the venture. This process will be closely followed by casino concession awards and approvals of licenses, which is expected to happen in 2019. An important factor which should be taken into account when talking about the future Japan-located integrated resort is the fact that the government is yet to clarify the local gambling rules and test them in various circumstances. MGM Resorts did not disclose whether the consortium which is going to become a partner is going to be required to take a minority or a majority stake in the project.
Japan is Looking Forward to a Dynamic Gambling Industry
Speaking of the amount of power a certain party in a collaboration has in the project, a couple of brokerages, such as Japan’s Nomura and Wells Fargo Securities LLC, have expressed their opinion that there is a possibility that foreign casino operators could be restricted and have the chance to own only minority holdings, even in the cases when they successfully bid for a Japanese license. For the time being, the government of Japan is yet to publicly issue a request for proposal framework. This means that at the moment the number of permits which are going to be available for acquiring is not yet decided.
Another thing which will require further consideration is whether or not local Japanese subsidiaries which are set up by some of the most influential casino operators in the world are going to be considered foreign or local entities. They still await their license bid and this information will be useful for equity investment purposes. In a report issued last month, Nomura stated that two major integrated resorts in Japan will guarantee gross gaming profit of about US$7 billion per year, which will prove to benefit the country in many ways.