In what might be the most anticlimactic decisions in the race for the Japanese integrated resorts, MGM Resorts International and Orix Corp. were privately informed by the Osaka Prefecture IR Selection Committee that they the designated entry for an IR in Osaka, according to Japanese news outlet Nikkei. While there were other bidders early on, many major gaming companies withdrew as regulations were promulgated, tax rates were set, and limitations announced by China concerning visits to other countries to gamble. Companies like Caesars Entertainment, Las Vegas Sands and Wynn Resorts left soon thereafter.
MGM remained, however, and its persistence has paid off. And with the powerful local company, Orix Corp., as a partner, there really was no competition, particularly when the other major operators withdrew. Osaka officials will make the official announcement with details of the project later this month.
But some of the original stipulations about the cost, size and timing of the project have been relaxed. Although the cost is expected to be in excess of $9 billion, the MGM/Orix consortium will have up to 15 years to complete it. Expected to open anywhere between late 2028 and early 2030, the crucial requirement for exhibition space was dropped to 20,000 square meters (215,000 square feet), but must be up to 60,000 square meters in 15 years and ultimately 100,000 square meters. Hotel space must be more than 100,000 square meters when it opens, and must be at least 3,000 rooms and suites within 15 years.
According to MGM Resorts CEO Bill Hornbuckle, MGM will invest no more than $2.5 billion over the years 2024-2026, and the equity division with Orix will be 40-40-20, with the 20 percent including other Japanese companies. He said, however, that he envisions greater investment from MGM beyond those years.
“There is a commitment we are making to Japan and to Osaka that we would be a true partner in this,” he told investors recently.
Osaka is the third Japanese city to designate an IR development partner. In June, Wayakama named Clairvest Neen Ventures, and last month Nagasaki recognized a consortium led by Casinos Austria. Last week, Yokohama’s new mayor said he was pulling his city from the race, making orphans of Melco Entertainment and Genting Malaysia who were hoping to be chosen
