Wed, Mar 27, 12:53pm by Staff Writer
MGM Resorts International has joined forces with a Japanese financial services group to form a consortium and jointly bid for the right to build an integrated resort in Osaka, Casino News Daily reports.
MGM and financial firm ORIX have partnered up ahead of the casino license bidding process.
The Nikkei Review estimates that the licenses could be worth up to 1.75 trillion yen (US$15.9 billion) a year.
News about the move arrived shortly after the Las Vegas and hospitality powerhouse’s chief executive officer Jim Murren told Bloomberg during his trip to Japan last week that his company would focus all its attention on being selected as the preferred developer of a property in Osaka.
Japanese financial services group ORIX Group announced last Friday that it would have an equity in a consortium with MGM that would bid for one of the three gaming licenses that will be available as part of the first phase of casino gambling liberalisation in Japan.
The amount of equity the two companies will take remains unknown.
A senior research analyst at brokerage company Sanford C. Bernstein said in a weekly note to clients, “MGM would not be a controlling party of the development.”
“This is the first clear sign the casino operators have less than 50 per cent or controlling stake,” Vitaly Umansky said.
The resort, which will include a casino, hotels, restaurants, a conference centre and other entertainment facilities will be operated by the consortium while MGM will manage the casino.
Mr Murren told The Nikkei Review on November 28th at his company already has various links to Japan, from holding kabuki performances in one of its symbolic resorts in Las Vegas to sourcing more than $30 million worth of food for the earthquake-hit northeastern region of Tohoku.
He said the company planned to invest “billions of dollars” in a potential resort in Japan.
MGM has previously indicated that it wanted to be a majority owner in a Japanese integrated resort development.
MGM Resorts Japan chief executive officer Ed Bowers confirmed on Monday that his company has been “working with ORIX to create Japan’s first integrated resort in Osaka.”
ORIX’s partnership with MGM was forged back in December when the two parties entered into a memorandum of understanding. This news was only announced to the public late last week.
Osaka will almost certainly be among the hosts of Japan’s first casino resorts.
The first wave of casino licenses will involve the issuance of three gaming licenses.
With strong support from local legislators, its winning bid to host Work Expo 2025 and an already available site for a future integrate resort, Osaka has been touted as one of the favourites in the race for hosting a property.
— CasinoOrg (@Casino_Org) March 26, 2019
MGM is not the only major gaming and hospitality company to be interested in operating an integrated casino resort in Osaka.
Macau’s Melco Resorts & Entertainment and Las Vegas powerhouse Las Vegas Sands have also shown appetite to leverage the city’s fertile tourism industry and popularity with international visitors.
The chief executive officer of Melco Resorts & Entertainment Lawrence Ho said his company was planning to invest “more than $10 billion” in Japan, while the Las Vegas Sands announced it was considering a similar sized investment.
The Osaka Integrated Resorts Fundamental Plan released last month included a development with a total floor space of up to one million square metres, with a proposal for Japan’s largest international conference centre.
Osaka is expected to begin the search for an operator as soon as next month.
The Japanese government will establish an oversight body for the casino industry which will take effect from July, followed by the announcement of detailed integrated resort guidelines later in the year.
Local governments interested in hosting a resort will select casino operators most likely next year, with the central government to then award the first three licenses. The first of these resorts is expected to open by 2025.
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