The CEO of Japanese financial firm Orix Corp. has announced that the company will be part of a consortium spearheaded by U.S. gaming giant MGM Resorts International to win an integrated resort license in Osaka.
According to GGRAsia, the agreement was made in December but not announced until March 22 in a statement by Orix CEO Makoto Inoue. The financial services firm has offices in both Osaka and Tokyo.
Local media report that Orix and MGM will likely have equal equity in the consortium, with smaller shares held by Osaka corporations; the U.S. gaming giant previously indicated that it wanted to be the majority owner.
“MGM would not be a controlling party of the development,” wrote Vitaly Umansky, a senior research analyst at brokerage Sanford C. Bernstein, said in a weekly note cited by the Nikkei Asian Review. “This is the first clear sign the casino operators may have less than 50 percent or controlling stake.”
MGM has affirmed its “Osaka first” policy: Chairman Jim Murren has said his company is willing to spend “billions of dollars” in a Japan resort. Other companies interested in the emerging market are Melco Resorts & Entertainment, Hard Rock International, the Las Vegas Sands Corp. and Genting.
The Osaka Integrated Resorts Fundamentals Plan includes a complex with total floor space of up to 1 million square meters (10.7 million square feet), with a proposal for Japan’s largest international conference center.
The MGM consortium and all would-be investors will be watching this week’s gubernatorial elections, to be held in 11 prefectures in Japan, including Osaka; the outcomes of those elections could have an impact on IR plans. According to Inside Asian Gaming, the race in Hokkaido is particularly noteworthy, as the ruling and opposition candidates have “completely conflicting stances.”
Naomichi Suzuki has so far been noncommittal. The former mayor of Yubari City, supported by both the Liberal Democratic Party and the Buddhist-influenced Komeito in the election, said he will “take into consideration all of the advantages and disadvantages to make the decision” on an IR.
Tomohiro Ishikawa, former member of the lower house and supported by the five opposition parties in this election, opposes an IR in the vicinity.
Local gubernatorial elections affecting IRs will also be held in Kanagawa and Osaka; it’s assumed that an IR is in the cards for the latter region, which will also host the 2025 World Expo. The candidates of Osaka Ishin no Kai (One Osaka), former Osaka Prefecture Governor Ichiro Matsui and former Osaka City Mayor Hirohumi Yoshimura, are firmly in the pro-IR camp and want the resort to open in 2024, before the World Expo begins.
Gubernatorial candidate Tadakazu Konishi, backed by the LDP, is not a big fan of integrated casino resorts, but has offered tentative support for the concept, saying it should be pursued “carefully” and not rushed.
The Japanese Communist Party, meanwhile, reportedly will support Konishi in an “all anti-Osaka Ishin” effort, the Times reported. And the influential Komeito is sure to come out against casinos and urge its followers to do likewise.
