Potentially lucrative project
The Osaka prefecture government has revealed that it will be partnering with MGM Resorts International and Orix Corporation in its attempt to get an integrated resort (IR) license for the city. Tuesday’s announcement from Osaka Governor Hirofumi Yoshimura revealed the details about the successful request for proposal submission from the MGM Resorts-led consortium. The group was the only bidder for the IR project in Osaka.
The Osaka prefecture government estimates that annual gaming revenue will be about JPY430bn ($3.86bn) from a potential IR, while the non-gaming revenue could be JPY110bn ($987m), for a total of JPY540bn ($4.85bn). The project would initially need about a $10bn investment, which is a bit more than was previously stated. The location would be Yumeshima Island, which is in Osaka Bay. The IR would create jobs for as many as 15,000 people.
A significant tourist attraction
The current project name of the planned IR is “WOW next to the Kansai and Osaka region” and the concept behind the development is being described as the “water city to connect people and things as a transport hub.” The government released an artist’s rendering of what the planned IR would look like.
The MGM Resorts-led consortium believes that there would be as many as 20.5 million visitors each year to the property, split between 14 million domestic visitors and 6.5 million overseas tourists. The current plan is to have an entry fee for domestic visitors going to the casino. This would generate about JPY33bn ($296m) each year for the city and the Osaka prefecture. In July, the Osaka authorities stated that it looks likely that the IR would open between 2028 and 2030.
an iconic, uniquely Japanese destination”
Speaking about securing this partnership in Osaka was MGM Resorts International president and CEO Bill Hornbuckle. He said: “We will work closely with prefectural/city municipal governments to deliver an iconic, uniquely Japanese destination warranting Osaka’s selection as home to one of Japan’s first integrated resorts.”
He went on to speak about how the future of hospitality and tourism is nowhere more exciting than in Japan and that the casino company hopes to enhance and grow Osaka’s worldwide reputation.
The plan now is for Osaka to officially apply to the central government by next spring for one of the IR licenses. The local government hopes that the world-class facility will help to attract tourists to the region.
The drawn-out IR application process
There is still no guarantee that Osaka will be the recipient of an IR license. However, it currently appears that there are only three interested parties for the three licenses – Osaka, Wakayama, and Nagasaki. Most recently, the newly-elected mayor of Yokohama decided to withdraw the city’s bid due to concerns about public safety and gambling addiction. Hokkaido had been considering making a bid, but there were local concerns about the environmental impact of such a project.
Many casino operators have expressed interest in IRs since they became legal in 2018. For a variety of reasons, though, many notable casino companies no longer have an immediate interest. Some cited struggles brought on by the COVID-19 pandemic, while others had concerns about the regulation of the IR sector.
The official central government application process for an IR license begins in October and will close in April 2022. It was originally to open in January 2021, but there were delays because of the pandemic. Local governments had to have an open tender process in order to choose a private sector partner for their IR license bid. Wakayama has chosen the Canada-based investment company Clairvest as its private partner, while the Nagasaki prefecture has gone with Casinos Austria International Japan as its partner. The central government plans to issue the licenses to the successful applicants in 2022.