Rapid transit operator Osaka Metro Co. Ltd. recently filed an application with the Japan Ministry of Land, Infrastructure, Transport and Tourism to operate a two-mile rail line from the prefecture’s mainland to an artificial island in Osaka Bay.
Yumeshima Island will host the 2025 World Expo and also be home to Japan’s first integrated resort (IR) with a casino. The latter property, a $10 billion project of MGM Resorts International and its local partner, the Orix Corp., is expected to open sometime in 2030.
According to GGRAsia, the rail link will be known as the Hokko Technoport Line, linking the Cosmosquare station on the Osaka Metro Chuo Line to Yumeshima. Osaka Metro said it plans to launch the new line “at the end of fiscal year 2024.”
In July, MGM Resorts President and CEO Bill Hornbuckle said construction of the Osaka IR should begin “by middle to late next year.” Developers project that the entertainment complex will attract 20 million annual visitors and employ around 15,000 people.
In a column in Inside Asian Gaming, Fred Gushin and Paul Bromberg of Spectrum Gaming Group wrote that, by any measure, Japan’s gaming industry has gotten off on the wrong foot. When casino gaming was first legalized in late 2016, the country was hailed as the next holy grail of gaming, with revenues expected to rival those of Macau.
The Covid-19 pandemic quenched the interest of many foreign investors, and ultimately, only two prefectures applied to host IRs (three licenses were up for grabs in the first round of development). Of the two bidders, only one, MGM/Orix, has gotten the green light to proceed. Nagasaki’s application is still under review.
“The fact that Tokyo, Yokohama and other prefectures decided not to proceed with an IR is significant,” wrote Gushin and Bromberg. “One potential IR prefecture was Wakayama, whose preferred choice was the junket operator, Suncity Group—yes, that Suncity!” which was dissolved last year when its founder, Alvin Chau, was arrested for illegal gaming. In January, Chau was convicted of various crimes and sentenced to 18 years in prison.
Suncity was “well-known in law enforcement and regulatory circles for many years as an entity that was not licensable,” wrote the Spectrum founders. “The fact that a prefecture would select them as its preferred choice for an IR license—an entity now officially described by the Macau courts as a criminal enterprise—reflects profound problems and concerns with respect to the prefecture selection process.”
Osaka “had a full-time professional staff guiding the process and meeting with potential applicants, whereas other prefectures failed to dedicate resources and budgets to the selection process,” they continued. “It is now clear that the prefecture processes were uneven and caused a false sense that Japan would evolve into a major gaming jurisdiction.”
Unfortunately, they concluded, “the opposite has occurred” and “many of the world’s most successful casino companies are deciding to ‘opt out’ of Japan. The internal politics, the lack of public support for IRs and lack of decision-making has cost the Japanese government and people considerable lost opportunity and tax revenue. In the long term, the extended process—at prefectural and then national level—and lack of clear guidelines has tainted Japan’s nascent gaming industry.”
