The Japan committee on integrated resorts (IRs) with gaming still have not announced if two proposed multibillion-dollar projects will proceed in Osaka and Nagasaki.
Now Bill Hornbuckle, president and CEO of Osaka partner MGM Resorts International, says the development timeline could go sideways if a decision isn’t made soon.
According to GGRAsia, during a fourth-quarter earnings call on February 8, Hornbuckle expressed his concern that the U.S.-based casino giant will be “challenged” to meet a projected opening date of 2029 “if we don’t hear soon” from lawmakers.
MGM Resorts and local partners including Orix Corp. want to build a US$8.25 billion IR with gaming on Yumeshima Island in Osaka Bay. Before Covid-19, an opening date was set at 2025, when the World Expo is due to be held on the manmade island.
The liberalization of gaming in the country was approved in 2016, under the late prime minister Shinzo Abe. It hit a wall with the Covid-19 pandemic. The global crisis softened interest in the jurisdiction, which once was called the “next Holy Grail” of gaming.
The government originally was willing to entertain three IR bids. But in the end, only two bidders qualified; their proposals went to the central government last April. In addition to MGM’s Osaka bid, Casinos Austria and its partners bid on a license in Nagasaki.
Hornbuckle continued, “Inflation has not hit Japan like it has in other places, and particularly for us, at our end of the partnership, the value of the yen has gone tremendously in our favor. But we’re still looking at a US$10 billion project. We’re looking at a return on that project, we think can bring 15 percent plus in cash flow.”
As he reminded analysts, the IR partners submitted their proposal “approximately 10 months ago. Unfortunately, I’m still waiting for the response from the government. But we’re being patient and believe we will hear soon.”
The two bidding coalitions expected to get the go-ahead last fall, and then anticipated a decision shortly after the first of the year. It hasn’t happened, and if the waiting game continues, said Hornbuckle, “We’re going to be challenged … to get this thing open before the decade close in 2029.”
