MGM Resorts CEO James Murren has confirmed the company will be pursing an “Osaka-first strategy” in its bid to secure one of Japan’s three IR licences.
MGM Resorts International confirmed that it is looking to build a casino resort in the Japanese prefecture of Osaka during its full-year earnings call on 13 February.
“We just recently opened up an office in Osaka. We’ve committed now to the mayor and to the governor of Osaka,” said MGM Resorts chairman and CEO James Murren. “MGM has adopted an Osaka-first strategy. We are focusing our considerable resources on Osaka.”
Japan’s Integrated Resorts Implementation Act requires local governments the wish to host a casino resort to make a formal resolution. Following this, interested local governments must select a business partner and put forward by a proposal to be evaluated by Japan’s national government.
“Our guess is that an operator will be selected by Osaka by early 2020. The next step for Osaka or any other jurisdiction is to go to the central government,” Murren said. “We think Osaka will be one of the three concessions that will likely be granted, but we know the central government has to select Osaka and its operator. That probably happens maybe 12, 18 months after Osaka itself picks its operator,” said Mr. “Osaka’s goal is to have an IR opened by 2025. That’s when the World Expo is in Osaka.”
Melco Resorts and Entertainment chairman Lawrence Ho has also previously highlighted Osaka as a front runner for hosting a casino and a possible target for his company’s bid.
Back in 2017, Ho stated that Osaka offers more opportunities than Tokyo. “When you go to the Kansai region, it’s more fun, really, and we’re a company that focuses on fun and entertainment,” Ho added. “I’m not so sure Tokyo needs an integrated resort. Tokyo by itself is amazing. It’s like when people ask me: ‘Do you think New York and London need an integrated resort?’ No, they don’t.”
The “Osaka IR basic plan” – a guideline drafted by the prefecture and city – calls for a JPY930bn ($8.5bn) investment in an IR, and establishes a 2024 opening date for a development.
In late February, Osaka mayor Hirofumi Yoshimura suggested that the city could have its own F1 race on Yumeshima, a man-made island in Osaka Bay, on the condition that an IR is also build at the site.
Despite this, commentators have pointed out that Japan already has a yearly F1 race at the Suzuka Circuit in Mie Prefecture. No country has regularly held two F1 races in the same year since the 1980s, so the probability of Japan getting a second race is low.
At present only the regional governments of Osaka,
Wakayama Prefecture and Nagasaki Prefecture have confirmed an interest in hosting an IR, according to a survey by Kyodo news agency.
Between November and December, Kyodu contacted all of Japan’s 47 prefectures and 20 major cities that are eligible to apply to host an IR, with 40 local governments confirming they have ‘No plans to apply’.
The government of Wakayama prefecture has also suggested that the region might have a “fair chance” to be selected, and ran a request-for-information (RFI) process in 2018, which attracted submissions from seven casino operators.
Wakayama has reportedly been given assurances by the Japanese central government that the area’s proximity to Osaka – both are in the populous Kansai region -would not count against it in the contest for one of Japan’s three IR licences.
“Considering the population of the Kansai region in general as well as the placement of Kansai International Airport, we feel we can create synergy and an even greater economic benefit between the two destinations should integrated resorts be allowed in both Osaka and Wakayama,” said the Wakayama prefectural government in a statement.
Several other potential locations currently remain on the fence. Nagoya, a city in Aichi prefecture, was said to be “positively considering making an application” for an IR.
Hokkaido prefecture has yet to make a formal decision about whether it wishes to bid but in January, an advisory panel to the regional government identified Tomakomai City as its preferred site for an IR.