Nagasaki, Osaka Submit IR Proposals Ahead of Deadline
Posted on: April 27, 2022, 05:35h.
Last updated on: April 27, 2022, 01:26h.
Japan’s campaign to bring integrated resorts to the country is now in the hands of the nation’s leaders. The only two remaining candidates, Nagasaki and Osaka, submitted their proposals Tuesday ahead of the April 28 deadline.
Nagasaki and Osaka can now do nothing but wait. The two prefectures have handed over their integrated resorts (IR) proposals to Japan’s national IR team. That team can choose whether to accept one project or two and could even reject both.
If accepted, both IRs won’t come cheap. Nagasaki predicts its project will cost almost $4 billion, including $1.37 billion in equity. This is substantially higher than the previous $2.9-billion figure floated when the prefecture laid out its plan.
Japan’s national IR committee will scrutinize the prefecture’s IR District Development Plans. It will weigh them against various criteria, including feasibility, economic contributions, safety, player responsibility, and more. It will then make the final announcement of accepted projects, with a decision possibly coming by the end of this summer.
Costs Continue to Rise
Nagasaki will provide some of the funding, but not all. The prefecture selected Casinos Austria as its casino partner. But the latest documentation lists the company’s local arm, Casinos Austria International Japan Inc., as an equity investor. Other sources of funds are anonymous at the request of those entities.
Osaka’s IR costs are even higher, and estimates that the project will run about $8.4 billion. Given that construction is pending on both, the final costs are likely to be significantly greater. MGM Resorts International and Orix Corp will collaborate on the project, although MGM has a trick up its sleeve if it gets cold feet.
If the national IR committee makes its announcement by this fall, as local media believes will happen, the prefectures will begin making arrangements to start building. In Nagasaki’s case, it expects to be able to have the initial phase of the new IR in place by 2027-2028. Osaka wants a little more time and has established a tentative deadline of 2029.
Wakayama Down, Not Out
The decision by the Wakayama prefectural government to drop out of the IR race at the last minute was a surprise. However, it might stage a round-two return.
Wakayama Governor Yoshinobu Nisaka believes that just because the prefecture rejected the plan once doesn’t mean it would again. Yesterday GGRAsia reported that Nisaka asserted that Wakayama should try again.
Some of them say that there is a possibility of the prefecture doing IR again in a better way. If it is done well, the prefecture should try again,” states Wakayama Governor Yoshinobu Nisaka.
The governor argues that the prefecture didn’t reject the idea of an IR. Instead, it rejected the proposal that the IR team presented. As such, there is still support for being a host.
Japan, when laying out its plans to introduce casinos, stated that it would approve up to three licenses in the first round. However, it also opened the door to future rounds and the possibility of more casinos. Wakayama will likely return to the drawing board and rewrite its proposal from scratch as it prepares for round two if the round comes.
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