Outlining its plans
Osaka has revealed plans for its integrated resort (IR) project, estimating annual sales of JPY540bn ($4.7bn) for the casino.
Osaka plans to break ground on the IR project in 2023
As part of the proposal, Osaka plans to break ground on the IR project in 2023 with the goal to open in autumn 2029. The plan includes a total floor area of 770,000 square meters. During the construction process, Osaka estimates that the project will have an economic ripple effect in the local region of around JPY1.58tn ($13.7bn).
Over the coming couple of months, Osaka plans to hold a number of public hearings and briefings in which residents will participate. Once the municipal and prefectural councils give the green light to this development plan in February, Osaka will then submit it to the central government in time for the April 28 deadline. It is expected that the development plan will get the all-clear in February.
A metropolitan IR
The core of Osaka’s plan, as reported by Inside Asian Gaming, is to create a metropolitan IR. The prefecture has long been a vibrant region in Japan with the city’s gross production totaling JPY40tn ($347.5bn). This figure doubles when also accounting for Kobe and Kyoto, both also part of the Keihanshin Metropolitan area.
If the central government awards one of three IR licenses to Osaka, developers will build the IR on an existing manmade island that lies in Osaka Bay. Osaka has partnered with a consortium involving US casino company MGM Resorts International and a local Japanese partner in the form of Orix Corporation.
Osaka has already secured commitments from at least 20 different corporations for investments as part of the IR project. This includes major general contractors, Osaka Gas, Kansai Electric Power, and Panasonic.
MGM’s role in the project
MGM Resorts has assessed potential IR opportunities in Japan since the central government legalized the resorts in 2018. It was the sole bidder for the Osaka project, getting official confirmation of its selection in September. Through its MGM Resorts Japan subsidiary, the casino giant is looking to build relationships in the region with local companies. It recently became part of the Osaka Chamber of Commerce and Industry.
SMBC Bank and MUFG Bank have both reportedly agreed to provide financing
MGM estimates that development costs for the IR project could total around JPY1.08tn ($9.4bn). About JPY530bn ($4.6bn) of this sum would include investment from various corporations, with the balancing sum generated through financing. SMBC Bank and MUFG Bank have both reportedly agreed to provide financing if the project goes ahead.
It appears that the only other regions seeking an IR license at the moment are Nagasaki and Wakayama. The application process has seen numerous delays due to the pandemic. The current timeline will see the government award the IR licenses before the end of 2022.