Japan’s IR Plans Begin to Come into Focus Following Recent Announcements
Posted on: December 22, 2021, 07:32h.
Last updated on: December 22, 2021, 08:59h.
Japan’s integrated resort (IR) market is slowly beginning to come into focus. There are still a number of issues open, but advances by Osaka and Nagasaki are clearing the air. By January, everything should be on the table.
Nagasaki continues to be the most vocal about its IR progress. It has provided several updates recently, and will have more information before the end of the year. The prefecture told GGRAsia that two companies have been added to the list of those that will participate in the program.
Two Companies Added to Nagasaki’s IR Plans
Hotel Sacher, a luxury hotel brand out of Austria, will be involved in the IR. Given that Casinos Austria was chosen as Nagasaki’s casino development partner, the company’s inclusion isn’t entirely unexpected.
A Japanese media company will be involved as well. Kadokawa Corp’s DWANGO Co Ltd will develop a multipurpose theater tentatively dubbed “Japan House.”
Before the end of the year, Nagasaki expects Casinos Austria to have all the pieces in place. The prefecture wants to know who will be involved and to what degree. The operator will also need to show how it intends on financing the IR development. It has until the end of January to provide the information.
After holding a few public hearings on its IR plans, Nagasaki is taking another step forward. It is now accepting written comments about its District Development Plan. Parts of the plan recently went through a re-draw in an effort to better showcase the project.
The public can provide its feedback until January 17. After that, the prefecture will review all the input, and starting in February, hold additional public hearings to give more updates. Undoubtedly, much of the conversation will focus on the project’s financing and the benefits the IR will bring to the prefecture.
Osaka Makes Big Moves Forward
Osaka has been relatively quiet about its IR plans over the past couple of months. It has only let small amounts of information drip out. However, that has now changed, and there is a much clearer picture of what’s coming.
At least an additional 20 companies will be involved in the IR. Osaka announced yesterday that firms like Panasonic Corp., Mitsubishi Electric Corp, Nippon Express Co. and West Japan Railway Co. will be investing in the project. How much they will contribute still isn’t known.
The resort will be constructed on Osaka Bay’s artificial Yumeshima Island. The city of Osaka will have to pay a total of 79 billion yen (US$692 million) for soil-improvement actions, which include site decontamination and measures to prevent soil liquefaction.
Initial plans were to open the IR prior to the 2025 Osaka Kansai Expo. The COVID-19 pandemic put a serious dent in the time frame. Even though 2029 is the new target, the plan could be delayed another one to three years. It all depends on how the pandemic unfolds and the progress made in improving the island’s land.
Osaka IR Target Needs an Overhaul
Yumeshima Island was found to have arsenic, fluorine, and other elements underground at levels exceeding Japan’s safety limits. The soil was also found to be liquefiable (changed from a solid to a liquid state), which raises other problems.
Osaka’s city government will allocate about 79 billion yen (US$691 million) to a special account for safety countermeasures.
The total initial investment for the entire casino resort project is 1.08 trillion yen (US$9.44 billion). Of that, primary operators MGM Resorts International and Orix will finance 530 billion yen (US$4.63 billion). Each will be responsible for around 40%. The remaining 20% will be covered by the new partners.
Like Nagasaki, Osaka will hold public hearings on its IR plans in February. Final plans for the IRs have to be submitted to the Japanese Diet no later than April 28 of next year.
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