Last Friday, after a year of deliberations, the Japanese government finally approved a plan to develop an integrated resort (IR) with a casino on Yumeshima Island in Osaka Bay.
In April 2022, partners MGM Resorts International and Orix Corp. submitted a bid to develop the $10 billion resort complex. MGM CEO Bill Hornbuckle has said, “Nowhere is the future of tourism and hospitality more exciting than Japan, and Osaka is the perfect location for that future to begin. We couldn’t be more excited for the opportunity to help enhance and grow Osaka’s reputation as a world-class destination and gateway for the world to the wonders and rich history of Japan.”
A second IR coalition led by Casinos Austria proposed building a $3.2 billion resort complex in Sasebo City, Nagasaki. That bid is still under consideration.
IRs with gaming were first approved in the Japanese parliament in late 2016, with the goal to “achieve attractive, long-stay tourism that is competitive on an international scale,” according to the Japan Casino Regulatory Commission. Up to three licenses were up for grabs, with a plan for more to be approved after the first seven years if the industry proved successful.
Pre-Covid, analysts called Japan “the next Holy Grail” of gaming, with the potential to be “the crown jewel” of the Asian market. They projected revenues of $25 billion to $40 billion a year, and predicted Japan could be second only to Macau as the world’s leading gaming market.
That all changed with the Covid-19 pandemic, which sent many would-be bidders scurrying and put the whole process on pause. In the end, only two proposals were filed; in addition to MGM, Casinos Austria and its local partners want to build a $3.2 billion IR in Sasebo City, Nagasaki.
On April 12, Nagasaki Governor Kengo Oishi said, “We have not received any information from the central government. However, we as a prefecture will continue to work toward hosting an IR.”
A spokesperson for the prefecture told GGRAsia that it continues to work with lawmakers to achieve “accreditation as soon as possible” for its proposal. Funding is seen as a sticking point when it comes to the Nagasaki IR, which would be sited near the Dutch-themed entertainment park Huis ten Bosch. In March, it was announced that Swiss bank Credit Suisse, which had been involved in the Nagasaki financing, hit a management crisis and will be acquired by UBS.
“For Nagasaki, there have clearly been some points that need further confirmation, mainly regarding the Credit Suisse acquisition, so it is logical that the decision on their approval will come later,” Joji Kokuryo, managing director of Japan-based industry consultancy Bay City Ventures Ltd, told GGRAsia.
Industry analyst Daniel Cheng added, “Nagasaki was never in the top political sights” for an IR site among lawmakers. “There’s no… inherent rush to certify them, and the Credit Suisse issue just exacerbated [matters].”
Meanwhile, work should begin shortly on the Osaka resort, which is expected to draw around 20 million visitors annually, 70 percent of them from outside Japan, and bring US$3.9 billion in annual economic benefits to the region. Osaka Mayor Hideyuki Yokoyama said, “We will do our best to move forward with thorough preparations.”
Osaka Governor Hirofumi Yoshimura reaffirmed his goal to “open an IR in 2029.”
According to the Asahi Shimbun, Osaka city and prefecture plan to build in measures to combat gambling addiction, such as limiting the number of casino visits per person within a certain timeframe. But a spokesperson for the group No! Osaka IR and Casino said, “The local governments’ burden for supporting addicted patients will only increase. If the IR isn’t built at all, then people won’t develop a gambling addiction in the first place.”
Japan has set a goal of welcoming 60 million foreign visitors annually by 2030, and hopes an IR will enable it to rival Singapore as a global center of meetings and conventions as well as entertainment.
However, in a proposal dating back to 2014, before IRs were first approved by the country’s parliament, Hornbuckle said his vision of a Japan IR was “uniquely Japanese, not a copy of an IR in Las Vegas or Singapore.”
