IR could create 80K new jobs
Global gaming operators are outdoing each other to win friends and influence people in Osaka, a leading contender for one of Japan’s first three integrated resort licenses.
According to Reuters, billionaire Lawrence Ho of Melco Resorts & Entertainment treated Osaka to a lavish fireworks display to celebrate the Tenjin Matsuri Festival in July. On the same day, Ho made a substantial donation–$450,000—to support disaster preparedness in the aftermath of a devastating June earthquake.
MGM Resorts International Chief Executive Officer Jim Murren entertained 100 of the elite on a chartered boat, and entertained them with a performance by the Blue Man Group. A headline on gaming website CalvinAyre.com put it bluntly: “Casino operators sucking up to Osaka.”
Expect the sucking up to continue. With a population of about 8.8 million, Osaka is considered prime territory for a resort complex, and is often mentioned in the same breath as Yokohama and Tokyo as logical locations for an IR.
In their quest for a license, Melco and MGM are competing with the Las Vegas Sands Corp., Wynn Resorts, Genting Group, Caesars Entertainment and Galaxy Entertainment, among others. Since the spring of 2017, executives from 11 different casino companies have met 119 times with Osaka Governor Ichiro Matsui, Reuters reported.
Due to estimates like that of Morgan Stanley, which believes an Osaka casino could potentially generate as much as $4 billion per year in gross gaming revenue, these operators are more than willing to make the effort to win hearts and minds in the city. MGM, the Sands Corp. and Melco each have indicated they would sink as much as $10 billion into a Japan IR, though Ho added that he “prefers not to constrain our dreams with price tags.”
Osaka isn’t the only object of casino operators’ affections. Ho has stated that he has no interest in developing an IR in Tokyo, because the major metropolitan area just doesn’t need such an attraction. And Yokohama Mayor Fumiko Hayashi has not come out one way or another about supporting an IR, though nine international IR operators have joined an RFI process in the city. Hayashi has called herself “a blank slate” on the issue.
“I will listen to the ideas of the experts and then make an extremely calm decision,” she said.
Osaka, on the other hand, seems to be all in. “Tokyo has not raised its hand,” said Ed Bowers, MGM’s executive vice president of global development. “Yokohama has not raised its hand. Osaka has raised its hand.”
Osaka Governor Ichiro Matsui told Reuters that he wants to “properly nurture the tourism industry in Osaka as one of its pillars.”
The people are not as committed to casinos as some lawmakers are. Some 42 percent of residents are opposed to a casino in Osaka due to concerns about gambling addiction and less than a fifth are in favor, a March poll by public broadcaster NHK showed. The government is reminding them that an IR in the vicinity could create as many as 80,000 local jobs, but Professor Teruo Sakurada of Osaka’s Hannan University says those jobs would largely be part-time and low-paying. “They want tourism and foreign demand to drive the local economy,” he said, “but this isn’t a sustainable model.”
The Japan Times reports that “Osaka’s politicians are obviously thrilled at being courted by the international casino industry. But the ultimate success or failure of an Osaka casino resort depends on whether local leaders are smart enough to follow the advice of experienced international experts in order to avoid turning an integrated resort into yet another failed public works project.”
