Construction on Japan’s First Casino Begins Five Years After Gambling Legalized
Posted on: December 6, 2023, 09:03h.
Last updated on: December 9, 2023, 12:42h.
Japan legalized commercial gambling with as many as three integrated resort (IR) casinos in July 2018. Nearly 2,000 days later, construction on the first project is officially underway.
MGM Resorts International, through its joint venture with Japanese financial services conglomerate Orix Corporation, signed its formal IR development with the City of Osaka and Osaka Prefecture in late September. MGM and Orix are equal 42.5% partners in Osaka IR Corporation, with the remaining 15% stake controlled by minor investors, including Panasonic, Kansai Electric, and West Japan Railway.
Osaka IR Corporation officially began construction of its JPY1.27 trillion (US$8.6 billion) scheme on Wednesday with site prep on Yumeshima, an artificial island in Osaka Bay where the 52-acre casino resort will stand, The Japan Times reported. The island spans nearly 700 acres and has been primarily used as a container port.
Before the first piece of steel goes down, some 230 feet to reach bedrock, workers are solidifying the land above to support such a project. The site prep costs are forecasted at $173 million. Osaka IR Corp. is funding the land readiness work, but the Osaka city government has pledged to reimburse the company upon completion of the resort.
Years of Delay
When Japan passed its casino law in July 2018, the country had the attention of nearly every major casino operator around the world. The Land of the Rising Sun was, at the time, considered the biggest market opening since China’s Macau around the turn of the century.
Along with MGM, casino giants that expressed interest in landing one of the three casino licenses included Las Vegas Sands, Caesars Entertainment, Wynn Resorts, Hard Rock International, and Mohegan. Japan’s lengthy rulemaking progressions following the passage of the casino bill led to those companies losing much of their excitement.
The COVID-19 pandemic further slowed Japan’s National Diet in finalizing casino regulations and bidding processes. Sands and its founder and CEO Sheldon Adelson finally had enough, and in May 2020, shocked the global gaming industry by announcing its withdrawal from consideration in Japan.
Sands was, at the time, the world’s largest casino operator by gaming revenue and was strongly believed to be a front-runner for one of the three licenses in Japan. Adelson, who died in January 2021, said at the time that Japan’s framework “made our goals there unreachable.”
Many others followed Sands’ lead in folding on Japan, but MGM stood firm in its unwavering commitment to Osaka.
MGM’s Osaka IR will open with three hotels from three distinct brands offering about 2,500 guestrooms. The complex will feature 730,000 square feet of convention space and attractions that “showcase the best of Osaka and Japan.”
The MGM Osaka gaming floor will be limited to 3% of the IR’s total indoor square footage, as dictated by the 2018 gaming bill. Osaka IR Corp. is targeting an opening in 2030.
Japan has only one other outstanding IR bid. It comes from Casinos Austria in Nagasaki. The gaming firm wants to build an approximately $3 billion IR casino destination at Huis Ten Bosch theme park in Sasebo.
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