MGM Resorts has responded to an accusation that it may have profited from unlawful online gambling services in Japan as a result of its recent takeover of LeoVegas.
As CasinoGamesPro previously reported, in April 2023, MGM Resorts was announced as the first holder of a Japanese casino permit, as part of a partnership with the city of Osaka. The US gambling giant is now expected to build an $8.1-billion integrated casino resort on the artificial island of Yumeshima, in Osaka Bay.
However, a Japanese anti-casino group, called “Society for Considering Gambling Addiction Problems” (SCGAP) has urged the competent authorities to revoke the casino operating license of the US gambling operator and to suspend the development project. The group explained that its action was triggered by reports that MGM Resorts has probably drawn benefits from “the criminal proceeds” that were obtained illegally by LeoVegas in the country. The group also accused LeoVegas of operating an illegal online casino service that previously targeted Japanese customers.
The Society for Considering Gambling Addiction Problems group claims that if the US casino and gambling behemoth has really benefited from LeoVegas’ operations, it would have breached articles 11 and 18 of Japan’s Act on Punishment of Organized Crime. Such a violation, however, would make MGM Resorts ineligible to be approved as a major shareholder in a local integrated casino resort under the existing Japanese casino laws and regulations.
LeoVegas Withdrew Controversial Online Gambling Services from Japan Before the Completion of MGM Resorts’ Takeover Deal
In response to the accusations, MGM Resorts Japan published an official statement on its website, highlighting the fact that the alleged wrongdoings made by the campaigner group were not only groundless and fully unacceptable, but may also lead to serious misunderstandings.
MGM Resorts took over the then-publicly traded Swedish operator LeoVegas in the fall of 2022 in an acquisition deal estimated at $600 million.
Previously, LeoVegas actually did target the Japanese market with a website in Japanese that offered various bonuses in the country’s currency. Its sister brand Royal Panda also targeted local residents.
However, in late August 2022 – right before MGM Resorts’ takeover deal – both online gambling platforms announced their decision to exit Japan at the end of the month. At the time, a spokesperson for LeoVegas explained that the exodus was not associated with the upcoming acquisition, even though the deal had managed to get all regulatory approvals only a few days before the Japanese market’s withdrawal announcement and was about a month away from completion. At the time, the LeoVegas’ spokesperson claimed that the company had been in pursuit of a different strategy, one that was more focused on regulated and regulating markets.
This, however, is not strictly true, or at least according to the latest statement of MGM Resorts Japan. The Japanese unit of the US casino and gambling giant claims that MGM directly called for LeoVegas to stop targeting Japanese customers in order to guarantee a smooth closure and execution of the takeover deal.
Even though the Japanese Government had officially given the green light to casino gambling, the expansion of the country’s gambling sector remains controversial. Only a day before the 2018 Integrated Resorts Implementation Act (IRIA) was officially passed to make casino gambling legal, a fight broke out on the Lower House’s floor. Apart from some opposition lawmakers, local residents also remain skeptical of the planned expansion, sharing concerns about the potential increase in crime and problem gambling rates.
According to the latest polls, the Japanese public is opposed to the establishment of integrated casino resorts by a 2 to 1 margin.