Wed, Apr 3, 11:00am by Staff Writer
Voters in Osaka will elect a new mayor and governor in elections this Sunday, with the result having implications on the city’s effort to obtain a licence for a casino complex in Japan’s third largest city.
On March 7, Osaka Prefecture Governor Ichio Matsui and Osaka City Mayor Hirofumi Yoshimura announced that they would resign and run for each other’s jobs under the banner of their Osaka Ishin no Kai (Osaka Restoration) Party.
They seek to swap jobs because if they ran for the same positions their terms would still expire respectively in November and December this year.
By swapping jobs, they each will get a full four-year term, provided they win, Forbes reports.
The election centres on the Restoration Party’s signature issue, merging the Osaka prefecture and city governments into a single entity, a metropolitan government with the same structure as Tokyo.
Voters most recently rejected the idea in 2015, and Ishin triggered a double election after that defeat.
In early March, Ishin’s erstwhile coalition partner Komeito blocked efforts for a new referendum, leading to this twin vote.
Japan’s national ruling Liberal Democratic Party opposed Ishin’s ‘Metropolitan Plan’ and after attempts to recruit celebrities failed, nominated veteran local politicians Tadakazu Konishi for governor and Akira Yanagimoto for mayor.
They two agree on nearly everything – except integrated resorts.
Under the leadership of Prime Minister Shinzo Abe, the LDP has spearheaded casino legalisation in Japan.
Legislation passed last July enables the creation of integrated resorts, entertainment complexes with casinos that could cost US$10 billion or more.
Osaka is a leading candidate for one of the three integrated resort licences.
The LDP nominees in Osaka naturally favour an integrated resort.
Osaka Election Could Impact Casino Decision. https://t.co/Govysen9NH
— Casino News (@Slots) April 2, 2019
The Ishin candidates, however, want an integrated resort even more.
In November, Osaka won its bid for World Expo 2025, and Matsui wants Osaka to open its integrated resort ahead of the Expo.
Both the Expo and Integrated Resort are planned for Yumeshima, an artificial island on Osaka Bay, south of the city centre.
Whether an integrated resort with thousands of hotel rooms, Japan’s largest exhibition and convention space and more can be opened by 2025 largely depends on whether Japan’s national government completes the integrated resort regulatory framework with uncharacteristic speed.
A casino executive requesting anonymity notes that the impact of the Expo will be counted in months, while the impact of the integrated resort will be counted in decades.
Osaka voters are unlikely to focus on the proposed integrated resorts timing when they go to the polls, and they won’t get a choice on the bigger question of whether they want an integrated resort at all.
Polling last year found only 19 per cent of residents sampled favoured an integrated resort, with more than twice as many opposed.
Casino proponents question those results, noting that Japanese doesn’t have a suitable translation for integrated resort and more detailed polling that explains the concept gets more favourable results.
MGM Resorts International recently 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.
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