MGM Resorts Secures Osaka Casino Rights, $9B Project Moves Forward
Posted on: September 17, 2021, 12:16h.
Last updated on: September 17, 2021, 01:19h.
MGM Resorts and its Japanese partner Orix have secured Osaka’s lone integrated resort (IR) development opportunity. With the prefecture and city blessing, the group will work with government officials to finalize its pitch to Japan’s central government for licensure.
According to Japanese news service Nikkei, the Osaka Prefecture IR Selection Committee this week accepted the MGM-Orix casino resort model.
The consortium announced in July that its IR plan is a JPY1 trillion (USD $9.1 billion) concept targeting the city’s Yumeshima Island. The artificial island is where much of the Expo 2025 world’s fair will be held in 2025.
Osaka selecting MGM and Orix comes as little surprise. The proposal was Osaka’s lone qualifying offer, and the Las Vegas-based global casino operator is one of the most respected gaming firms in the world.
Orix is a leading financial services firm based in Japan. The group is headquartered in Minato, Tokyo, and Osaka.
Odds Favor MGM License
MGM Resorts wasted little time in announcing its intentions to bid on Japan’s forthcoming casino market after the country legalized commercial gambling in July of 2018.
Three years ago, Japan had the attention of the world’s biggest casino operators. Along with MGM, notable firms that were expected to bid included Las Vegas Sands, Caesars Entertainment, and Wynn Resorts.
Japan’s drawn-out legislative process and determining of regulations to govern gambling resulted in much of that enthusiasm being lost.
Today, MGM is the only globally recognized casino unit that has an active IR pitch in Japan. The Clairvest Group and Casinos Austria — the respective IR development partners of Wakayama and Nagasaki — certainly don’t carry the same esteem and brand awareness of MGM Resorts.
Should Japan carry on with its IR and commercial gambling ambitions, the odds are good that MGM Resorts and Orix will receive licensure. The central government will field IR tenders from prefectures next month through April 2022.
Economic experts in the Osaka area believe the multibillion-dollar MGM property will provide much-needed economic diversification.
“Up until now, the Kansai region’s economic axis has been the electrical and electronic component industries. But, from now on, the focus will shift to the tourism industry,” opined Atsuhito Wakabayashi, director of the Kansai Economic Research Center of the Japan Research Institute.
MGM Resorts, citing the ongoing COVID-19 pandemic, announced earlier this year that it would seek a reduced investment role in Osaka. During the company’s second-quarter earnings call, MGM Resorts CEO Bill Hornbuckle said MGM and Orix would control equal parts of the integrated resort.
The program with Orix is for 40-40-20, meaning a consortium of other Japanese companies will make up to 20 percent. If not, we both fill to 50 percent,” Hornbuckle told investors and analysts.
The MGM boss said the company’s investment would be around $2 billion, with a cap set at $2.5 billion.
If MGM-Orix and Osaka are issued one of the three IR licenses by Japan’s central government, the casino destination would target an opening date in the latter part of this decade.
Though there are three IR licenses and currently only three IR pitches, Japan isn’t required to award all three permits.
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