U.S.-based casino operator MGM Resorts International is to have a minority stake – of up to 45 percent – in a mooted resort scheme in Japan, said on Thursday the firm’s new chief executive and president, Bill Hornbuckle (pictured in a file photo).
“We will have between a 40- and 45-percent stake”, Mr Hornbuckle said, in reference to MGM Resorts’ partnership with Japanese financial services group Orix Corp for the development of a casino resort in the Japanese city of Osaka. He added that the stake was “relative to the overall investment and the risk-reward [premium]” related to the development of casino resort in Japan. Mr Hornbuckle did not further elaborate on the topic.
His comments were made during a conference call with investment analysts following MGM Resorts second quarter results’ announcement.
Mr Hornbuckle stressed that MGM Resorts would only pursue a casino resort in Japan if the firm considered it to be a “prudent” investment, that is “going to pay the kind of returns it needs to pay.”
He added: “There is a long way to go… We like that we are not fully ‘all-in’ on this investment. We like the fact there is probably going to be a delay [in the casino licensing process] and a reopening of some of the conversations, that will hopefully make this a better investment for anybody interested in it, most notably us.”
In February, the Osaka authorities said the only qualified applicant for its request-for-proposal (RFP) phase for a casino scheme was the MGM Resorts-Orix consortium.
Despite being the sole qualified applicant, the consortium still needs to undergo all the remaining stages of the Osaka RFC process until an official decision on the selected private-sector partner is announced by the local authorities.
In June, the Osaka prefecture and city authorities confirmed they had extended the deadline for the RFP process in their tilt at having a casino resort. No specific cut-off date in relation to the refreshed deadline was mentioned at the time by the authorities.
Japan has in recent months been tackling its own Covid-19 outbreak stemming from the pandemic. An MGM Resorts Japan LLC representative told GGRAsia in June that the Covid-19 pandemic had “affected business travel and the ability of members of [MGM's] Las Vegas team to travel to and from Japan to meet and continue discussions with Osaka prefecture/city.”
In his Thursday’s comments, Mr Hornbuckle confirmed that Osaka’s RFP process had “been stopped”.
He added: “We do believe it will be delayed, presumably to the first part of next year, but officially we don’t know that yet.”
Local governments in Japan wishing to host a casino resort will need to apply to the central authorities for the right to have one. A maximum of three resorts will be permitted in a first phase of liberalisation. The final basic policy document on integrated resorts – due to set out the criteria by which casino applications will be assessed by the national government – is yet to be disclosed publicly.
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Aggregate amount spent by digital media firm IAC to acquire a 12-percent stake in U.S.-based casino operator MGM Resorts