MGM, Melco may be first in line for IR
On November 23, Osaka, Japan won its bid to host World Expo 2025, beating out cities in Russia and Azerbaijan for an event expected to draw millions of visitors. That victory could also boost Osaka’s chance to host one of Japan’s first three integrated resorts, which could be opening just about the same time, says Kentaro Maekawa of brokerage Nomura.
“By being selected to host the World Expo, Osaka has even greater prospects of being awarded a license to operate an integrated resort including casino at Yumeshima, which could spur additional construction investment,” Maekawa said in a November 25 note.
“We could also see progress with construction of MICE facilities and hotels aimed at meeting demand from integrated resorts,” the note said. In August, Reuters reported that at least eight casino firms were courting Osaka as a site for a casino resort, with MGM and Melco considered frontrunners.
Osaka first hosted the World Expo in 1970; according to the Japan Times, the event was “one of the most successful ever,” drawing 64 million visitors. But the big win also brings big pressure: the city, prefecture and Kansai region have less than six and a half years to prepare for the event, with construction costs estimated at ¥125 billion (US$1.1 billion). Some observers worry the costs could soar well beyond that; in the case of the
2020 Tokyo Olympics, for example, government spending has already exceeded ¥800 billion, more than seven times an earlier estimate, according to the Japan Times.
Not to worry, say Osaka officials, who believe the expo will bring in 28 million visitors who could add ¥2 trillion (US$1.1 trillion) to the economy.
Prime Minister Shinzo Abe hailed the win, saying, “This is an excellent chance to demonstrate Japan’s charms to the world, and I’m confident it will trigger local revitalization and an increase in the number of tourists visiting Japan.”
