Mon, May 6, 12:27pm by Staff Writer
The Japanese city of Osaka is in the box seat to be the first to develop an integrated resort in the country, according to Forbes.
None of Japan’s other larger metropolitan areas have entered the competition for an integrated resort licence, so Osaka stands alone.
Under the licencing process, local jurisdictions will nominate a single consortium for the national government to consider for a licence.
It is now imperative for casino operators and their partners to be able to convince local authorities that they are their best choices.
As Osaka launches its selection process, expect extraordinary competition among at least a half-dozen of the biggest names in gaming, and in this beauty contest, second place won’t even get a bouquet.
“For a successful development, you need a number of things to align: a sufficient population base, including tourists, to feed customers, infrastructure and political support,” MGM Japan CEO Ed Bowers says.
“Osaka has consistently said it wanted integrated resorts. In all jurisdictions across the world, if you don’t get political support, it is extremely difficult for IR development to be successful,” he said.
In January, MGM declared as “Osaka First” strategy and in March, confirmed a partnership with Japanese financial services giant Orix.
The Tokyo-Yokohama metropolitan dwarfs other metropolitan areas with 37 million people, nearly 30 per cent of Japan’s 126 million residents.
But Tokyo remains preoccupied with next year’s Olympics and Yokohama has a festering rift between port operators opposing an integrated resort on Yamashita Pier, with some business leaders supporting an integrated resort.
Kansai region, including Osaka, Kobe, Kyoto and Wakayama has 19 million people, 15 per cent of Japan’s population.
The next largest metropolitan areas, centering on auto manufacturing hub Nagoya, with just over 9 million people is not expected to seek an integrated resort.
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“We believe the major cities like Osaka offer the best opportunities for IRs to be developed on a large scale, similar to what we have developed in Macau,” Galaxy Entertainment Japan general manager Satoshi Okabe says.
Last week, Osaka announced it would start its Request for Concepts process, even before the national government has finished making the rules, aiming to choose its IR operator next year.
This follows Osaka Ishin no Kai (Osaka Restoration) winning last month’s elections for mayor and governor, with the goal of opening an IR on Yumeshma island before World Expo 2025.
Melco Resorts and Entertainment senior vice president Frederic Winckler called World Expo “an incredible launch platform” for an IR and praises Osaka’s “dynamic” business community.
“The Osaka government is very committed to bringing an integrated resort to the city and has shown strong leadership,” Las Vegas Sands managing director for global development George Tanasijevich says.
Also president and CEO of iconic urban IR Marina Bay Sands in Singapore said Japan’s Prime Minister Shinzo Abe made his first stop on a 2014 visit to Singapore, Tanasijevich adds, “a key element in the success of an integrated resort is support and alignment with government and local community.”
“Osaka is still the only city that offers this and is actively pursuing the opportunity. Accordingly, we have devoted our energies, efforts and resources there,” Tanasijevich said.
A newspaper survey before the April 7 regional elections showed that 45 per cent of residents supported an IR, with 42 per cent opposing it.
“This result is largely due to the strong public and private sector leadership working over multiple years to build understanding of the multi faceted benefits of IRs to host communities,” Caesars Entertainment Japan managing director William Shen says.
Global Market Advisors estimates annual gaming revenue at an Osaka IR would exceed US$5 billion.
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