A consortium led by U.S. gaming giant MGM Resorts International is the sole qualified bidder for an integrated resort (IR) in Osaka, Japan, the prefectural government announced on February 14. MGM’s partner in the project is Japanese financial services group Orix Corp.
MGM has long been a front-runner in the once-crowded race to build an IR in Osaka. Last year, Wynn Resorts Ltd., Melco Resorts & Entertainment and the Las Vegas Sands Corp. all bowed out of contention in the area, preferring to focus their efforts on Yokohama and, in Wynn’s case, the Kanto region, including Tokyo.
But MGM was steadfast. The parent of MGM China Holdings in Macau hopes to build an IR on Yumeshima Island, which will host the World Expo in 2025; MGM’s outgoing CEO Jim Murren once insisted the resort could be up and running before the expo, but eventually conceded that the timeline was impractical.
Other bidders in the market once included Galaxy Group and Genting.
Casino operators hoping to break into the Japan market must first be selected as local-government partner; then that partner area must be chosen by Japan’s national government. A maximum of three IRs will be approved in Phase I of the nascent industry here; after seven years, the government may consider a second phase of development.
According to according to analysts at Bernstein, MGM’s decision to divest two major assets in the United States—Bellagio and Circus Circus on the Las Vegas Strip—will raise $4.3 billion in net proceeds, which could serve as funds for a development in Japan.
Osaka hopes to make a final decision on who will win the project in June, but it seems likely MGM is already the “winner,” according to Asia Gaming Brief. But the victory may be tarnished somewhat, the news outlet continued. “It will certainly be an embarrassment to the Osaka government that only one IR operator candidate came through with a bid, especially when just a year ago it was the most sought-after municipal government in Japan.”
The government of Prime Minister Shinzo Abe is the chief propeller of IRs as a way to boost tourism. But the plan continues to be unpopular with the public, given concerns that large-scale casinos could lead to a rise in addiction, crime and corruption. Public perception worsened with a bribery scandal involving a ruling-party lawmaker alleged to have taken bribes from a Chinese gaming company.
