MGM Resorts International renewed its push to establish a presence in Japan by making a formal proposal for the construction of a $9-billion casino resort in Osaka.
As previously reported, global casino operators have been willing to take advantage of the newly-created opportunities that have emerged since the Japanese Government made casino gambling legal in 2018. Unfortunately, since then, the process has moved slowly, with a number of delays having taken place, and some companies have left the bidding process.
Osaka, which is the second most-populous region in the country after Tokyo and its surrounding area, has been among the locations that have been actively pushing plans to become home to an integrated casino resort. The city has offered Yumeshima – a man-made patch in Osaka Bay – as a suitable location to host an integrated casino resort.
On July 21st, the Governor of Osaka, Hirofumi Yoshimura, confirmed that the local authorities have received a proposal from MGM Resorts and the local financial-services operator Orix Corp. The casino project of the US gambling operator involved making an investment of about $9 billion to establish a casino resort in Osaka. So far, this has been the only group pursuing such a project there.
Osaka Government Has Not Yet Given approval to MGM Resorts’ Casino Project
For the time being, the Government of Osaka has not given official permission to the consortium’s project but Governor Yoshimura welcomed the proposal. If the project is given the green light, local authorities plan to apply to the national government by April 2022 to become one of the three locations in Japan that would be officially allowed to host an integrated casino resort. If Osaka is granted one of the casino operating licenses, the planned resort is expected to become operational in the latter half of the 2020s.
As revealed by the Japanese financial-services firm Orix Corp., it and its US partner have equal shares of the consortium. The company, however, refused to reveal what that share is.
During a Bernstein investors’ conference that took place in June, the Chief Executive Officer of MGM Resorts Bill Hornbuckle revealed that the gambling company met with Osaka leaders to consult on some elements of the resort, including meeting and convention space. As Mr. Hornbuckle revealed, the changes would make the company more focused on its core business of gaming and make the returns on the project better.
According to recent research, most people in Japan are against casino gambling. Proponents of the expansion of the country’s gambling, however, claim that casinos would be only a small part of so-called integrated resorts – large, luxurious complexes offering a variety of entertainment and hospitality options.
A number of operators have decided to stop pursuing a casino in Japan following some delays in the licensing process. Back in May 2020, Las Vegas Sands Corp. announced it dropped its integrated casino resort proposal for Yokohama because of concerns that the operating license would last only 10 years. At the time, the US gambling operator shared that its decision to no longer participate in the IR competition was not related to the coronavirus pandemic.