Osaka Integrated Resort Request for Proposal Plan Starting Anew in January
Posted on: December 7, 2020, 09:44h.
Last updated on: December 7, 2020, 10:40h.
Osaka, Japan’s third-largest city, will restart its request for proposal (RFP) outreach for integrated resort operators in January after delaying the process in June because of the coronavirus pandemic.
Clarity is finally merging on the city’s plans to work with private sector companies to land one of the first three gaming licenses that will be awarded in the Land of the Rising Sun. Along with Tokyo and Yokohama, Osaka is seen as a leading contender to be home to one of the country’s first gaming properties. Aichi, Nagasaki, and Wakayama are the other prefectures in the fray.
News that Osaka is restarting the RFP process comes at an important time for Japan’s aspirations of becoming the Asia-Pacific region’s next major gaming destination. There have already been multiple delays at the local and national levels when it comes to setting integrated resort policy, postponements that annoyed many operators.
In October, the federal government moved the deadline for cities to submit proposals to October 2021, with an eye toward April 28, 2022, as “decision day.”
Osaka RFP Process Could Be Brisk
Barring the emergence of a surprise competitor, Osaka’s RFP process could be swift. As the landscape shapes up today, MGM Resorts International and local partner Orix is the only group targeting the city for a high-end casino-resort. Orix is an industrial conglomerate.
The largest operator on the Las Vegas Strip, MGM, is long bullish on Japan. But broader excitement for Osaka gaming largely centered around the opening in advance of the World Expo in 2025. Now, it appears that if the city is successful in winning a license, the subsequent gaming property won’t open until 2027 at the earliest.
On the company’s second-quarter earnings conference call on July 30, MGM CEO Bill Hornbuckle said the operator and partner Orix are ready to submit their RFP. He added that the company likes its Japan positioning because it’s not an “all-in” commitment for the firm. MGM’s slice of the Osaka deal, assuming it comes to life, will be 40 percent to 45 percent.
MGM Commitment Vital to Osaka, Japan Aspirations
Going forward, just how committed MGM and Orix remain to Osaka could be telling for Japan’s hopes of becoming the next Macau or Singapore.
Previously, analysts forecast that the Land of the Rising Sun could become the world’s second-largest casino market behind Macau when it reaches maturity.
That was enough to lure many of the biggest operators. But whopping expenses and procedural delays prompted multiple gaming companies to cool on the world’s third-largest economy. The largest expenses stemmed from plans for a single high-end integrated resort that could cost an estimated $10 billion to $15 billion to build.
Over the past several months, Las Vegas Sands withdrew from the Yokohama competition. Wynn Resorts closed its office in that city, and Genting Singapore spoke in a tepid fashion regarding its Japan ambitions.