‘The basic stance on IR of Hokkaido prefecture’ was made public on Tuesday following its presentation a day earlier to a committee of the Hokkaido Prefectural Assembly.

It is intended to serve as the foundation for governor Naomichi Suzuki’s eventual decision on whether Hokkaido (pictured) should prepare and submit an IR District Development Plan to the national government.

The next IR application window set by the national government – open to prefectures and so-called ordinance-level cities – is between May 6, 2027 and November 5, 2027.

The draft published on Tuesday focuses on two main themes: the purpose of an IR development and the direction of a potential Hokkaido casino resort. It argues that a casino resort could help boost tourism demand, expand visitor spending across the prefecture, generate broad economic benefits, and provide funding for social welfare and cultural initiatives through casino-related levies.

Under the proposed vision, a Hokkaido IR would aim to serve as an international gateway linking Hokkaido with the rest of Japan and overseas markets, support growth in local industries, and improve residents’ quality of life through enhanced public services and cultural offerings.

The draft emphasises the use of Hokkaido’s natural environment, food resources, culture and regional attractions as core elements of the resort concept.

The policy framework also stresses that any future IR should be sustainable, minimise reliance on casino operations, adopt advanced technologies, and incorporate effective measures against gambling addiction, money laundering and other potential social impacts.

The draft says core non-gaming facilities should be profitable on a standalone basis and generate sustainable visitor demand, while casino revenue would support reinvestment in facilities and provide broader social benefits.

The document notes that the environment surrounding IR development has changed significantly since Hokkaido first adopted an IR policy in 2019. Hokkaido had expressed interest in hosting an IR prior to the first application round, but eventually dropped out of contention in late 2019, before the first round began.

Despite detailing the vision for a potential casino resort, the preliminary draft does not specify whether Hokkaido should ultimately proceed with an IR bid. It also makes no reference to any candidate host municipality.

That omission has drawn attention in local media reports, according to GGRAsia’s Japan correspondent, given that Tomakomai was seen as Hokkaido’s preferred candidate location.

The prefecture said several issues require further examination before a final version of the policy can be completed. These include the overall direction of a Hokkaido IR, the effectiveness of measures to address gambling addiction, and the role an IR could play in resolving regional challenges.

The Hokkaido government now plans to conduct interviews with IR operators and related businesses, as well as with municipalities across the prefecture.

The timetable for finalising the policy remains unchanged. A final draft of the document is due to be presented to the prefectural assembly in September, with Hokkaido’s basic position on the matter expected to be finalised in October, according to GGRAsia’s Japan correspondent.

Japan’s only approved casino project is the JPY1.51-trillion (US$9.42-billion currently) MGM Osaka. It involves Osaka city and prefecture, and their commercial partners MGM Resorts International, Japan’s Orix Corp, and other local companies, and is due to be completed by the end of 2030

A final draft of a paper called ‘The basic stance on IR of Hokkaido prefecture’ is due to be presented to the prefectural assembly in September, with Hokkaido’s basic position on the matter, due to be finalised in October, according to GGRAsia’s Japan correspondent.

The next IR application window of the national government – open to prefectures and so-called ordinance-level cities – is between May 6, 2027 and November 5, 2027.

‘The basic stance on IR of Hokkaido prefecture’ is to be the foundation for the governor, Naomichi Suzuki, to decide on whether to go ahead with the casino resort initiative, and ultimately to make and submit its ‘IR District Development Plan’ as required by the national government. That is according to GGRAsia’s correspondent.

If Mr Suzuki decides to go ahead, ‘The basic stance’ paper should also be the starting point for an implementation policy on the matter.

Per Tuesday’s prefectural assembly meeting, the current draft of ‘The basic stance’ paper mentions: “The IR business entity should be a special purpose company (SPC) with Hokkaido companies being part of it.”

The paper added: “The purpose of establishing the IR is to capture new tourism demand from affluent individuals and inbound tourists and to maximise the economic effect throughout Hokkaido prefecture.”

It also clarified: “The location municipality will be required to make administrative investments, such as securing land and developing infrastructure.”

Separately on Tuesday, it emerged that Hakodate – a Hokkaido city that had been mentioned as a possible IR site as an alternative to the frontrunner port city of Tomakomai (pictured) – has not yet achieved community consensus on whether to put itself forward.

As a result, Hakodate city council appeared to rule itself out of contention.

During a Tuesday question-and-answer session at a Hakodate city council plenary meeting, the authority said in a statement: “An IR in the city should have a positive economic effect. However, at this moment, the city has not yet established any consensus among the civil population to try having it. The city has not secured land for it.”

“In conclusion, it is almost impossible to work on it for the next application window,” it added.

Japan’s only approved casino project is the JPY1.51-trillion (US$9.42-billion currently) MGM Osaka. It involves Osaka city and prefecture, and their commercial partners MGM Resorts International, Japan’s Orix Corp, and other local companies, and is due to be completed by the end of 2030.

The Okada Manila complex is controlled by Tiger Resort, Leisure and Entertainment Inc, a subsidiary of Japanese conglomerate Universal Entertainment Corp.

The Manila casino resort said in a Thursday statement that changing travel preferences among Japanese consumers and the recovery of overseas travel demand had prompted the group to expand support services and improve the overall guest experience for Japanese patrons.

Okada Manila described Japan as an “important target market” and said it was implementing a range of initiatives aimed at providing greater “comfort, language support and personalised services” for Japanese guests.

As part of the effort, the property announced last month the launch of “Ariake”, described as a gaming club designed for Japanese VIP guests.

Ariake is part of the overall strategy of attracting international premium players, per Okada Manila.

The club is said to feature a selection of table games and “premium gaming machines”. It also offers a “private table games salon,” to promote a sense of exclusivity to customers, according to the announcement.

In Thursday’s announcement, Okada Manila mentioned enhancing support for international visitors, including service delivery in relevant languages, and in hospitality and facilities designed to meet “cultural preferences and usage” requirements.

It would in particular continue to boost services and guest offerings for the Japanese market as it seeks to position itself as a “preferred overseas destination” for travellers from Japan, according to the statement.

In May, Universal Entertainment acknowledged that the gaming industry in the Philippines continued to “face structural headwinds,” as Okada Manila’s first-quarter results “fell short” from a year earlier.

“We recognise that the gaming market in Entertainment City, Manila, Philippines, remains in a period of adjustment,” the parent said in its first-quarter earnings report.

“Against the backdrop of structural changes in the VIP market, fierce competition with rivals to acquire mass-market customers continues, driving up customer acquisition costs,” it added.

The group also announced the launch of the “Okada Play” online gaming platform last month in partnership with gaming technology provider PhilWeb Corp.

The aim is to choose a developer for Phase 2 by the winter of financial year 2026-27, per the outcome of a Wednesday meeting. Phase 2 – to have a development cost of circa JPY1 trillion (US$6.25 billion) – is designed to support the MGM Osaka project.

The JPY1.51-trillion casino scheme – involving Osaka city and prefecture, and their commercial partners MGM Resorts International, Japan’s Orix Corp, and other local companies – is due to be completed by the end of 2030 and forms the core of Phase 1.

According to GGRAsia’s Japan correspondent, the city will take two steps for the selection of the Phase 2 developer. Step one is to examine the content of proposals and step two is a price competition for purchase of the relevant piece of land, said to be circa 42 hectares (103.8 acres).

An RFP for Phase 2 had been scheduled for last year, but was delayed due to changes to the Phase 2 master plan, made at the request of the Kansai Economic Federation, according to GGRAsia’s correspondent. The Phase 2 master plan ‘3.0’ now sees the original 50-hectare footprint available for commercial-sector use, reduced. That is to account for a 2.9-hectare ‘memorial park’; a 1.5-hectare ‘Osaka Healthcare Pavilion Site Utilisation Zone’; and a balance of 3.6-hectares for other yet to be defined purposes.

At Wednesday’s meeting, the Osaka city authorities disclosed that on May 27, two groups – led respectively by Obayashi Corp and Kanden Realty & Development Co Ltd, and which had previously made Phase 2 proposals deemed ‘excellent’ by the authorities – would merge their Phase 2 effort.

Obayashi Corp and Kanden Realty & Development are among the minority investors in the MGM Osaka scheme itself.

One of the proposals, involving Obayashi Corp as the principal and six other companies, suggested a large arena, motor sport facilities including a racing circuit, an automobile-themed park, and a luxury hotel.

The other suggestion consisted of Kanden Realty & Development as the principal, alongside Keihan Holdings, Sumitomo Corp, Takenaka Civil Engineering & Construction Co Ltd, Nankai Electric Railway Co Ltd, and Yoshimoto Kogyo Holdings.

Its proposal involved a resort complex featuring distinctive luxury hotels; water parks; and a variety of commercial facilities.

People Inc, formerly known as IAC Inc, has made a non-binding all-cash offer of US$48.30 per share for MGM Resorts. The offer is said to value the casino group at more than US$18 billion, including circa US$6.40 billion in net debt.

The proposal would see People Inc retain a controlling 50.1-percent stake in the business following completion, according to a Monday press release.

While analysts broadly view the bid as strategically credible, attention is increasingly turning to MGM Resorts’ international assets, particularly its Macau unit and the company’s casino resort development in Osaka, Japan.

Seaport Research Partners said MGM China, 56-percent owned by MGM Resorts, could become one of the most important pieces in any post-acquisition restructuring. The brokerage raised the price target for MGM China, citing the Macau operator’s strong market-share performance in the local market and what it described as an “undemanding” valuation.

Seaport’s analyst Vitaly Umansky suggested in a Tuesday memo that any future sale of the Macau business could unlock additional value for MGM Resorts’ shareholders.

The research house suggested a People Inc-controlled MGM Resorts might ultimately regard Macau and Japan as non-core assets if management chooses to place greater emphasis on digital gaming operations. Under that scenario, proceeds from potential asset sales could be redirected toward expanding MGM Resorts’ online gaming footprint or increasing exposure to BetMGM.

CBRE Equity Research observed in a Tuesday note that MGM Resorts’ stake in the Macau unit “is currently valued at US$3.3 billion,” and that MGM China “contributes an estimated US$316 million of annual cash flow between dividends (US$201 million) and management fees (US$11.5 million)”.

“Over time, People [Inc] could look to divest all or part of the MGM China stake to help finance its proposed acquisition, fund the Osaka equity commitment, or return equity to its minority partners,” wrote analysts John DeCree and Max Marsh.

Possible outcomes

Seaport’s Mr Umansky identified several possible outcomes. One scenario would involve MGM Resorts selling its stake in MGM China while the Hong Kong-listed company remains publicly traded. MGM China chairperson, Pansy Ho Chiu King, who already owns more than 24 percent of MGM China, was identified as a potential buyer, possibly alongside financial partners.

Alternative buyers could include existing Macau concessionaires. The Seaport analyst stated that Galaxy Entertainment Group Ltd and Sands China Ltd would have the financial resources to pursue such a transaction, although regulatory considerations could affect the likelihood of approval by local authorities.

Japan represents another potentially significant strategic consideration. MGM Resorts owns a 42.5-percent stake in the JPY1.51-trillion (US$9.49-billion currently) MGM Osaka project, due to open in 2030.

Mr Umansky said a future owner could seek to dispose of that interest, although any transfer would depend on contractual arrangements and government approval. Potential replacement investors, according to the brokerage, could include Las Vegas Sands Corp, the parent of Sands China; Galaxy Entertainment; Hard Rock International; Wynn Resorts Ltd; the Genting Group; or Melco Resorts & Entertainment Ltd.

CBRE noted in Tuesday’s memo that MGM Resorts still faces approximately US$2.3 billion of remaining equity commitments to the Osaka development over the next several years, making Japan a key consideration in any acquisition financing plan.

Analysts also highlighted the unusual structure outlined in the proposal. People Inc indicated it expects to own just over 50.1 percent of MGM Resorts if the deal is completed, with the remaining equity held by rollover investors and other partners. 

CBRE estimates that could create a roughly US$3.3 billion opportunity for minority investors to participate in the privatised company, alongside a combination of new debt financing and cash resources.

Such a structure could give the new owners flexibility to monetise selected international assets while retaining exposure to MGM Resorts’ core U.S. casino operations and digital gaming businesses, the analysts stated.

The credit ratings agency cited continued weak performance at the Okada Manila casino resort in the Philippines, controlled by the Japanese group’s unit, Tiger Resort, Leisure and Entertainment Inc.

S&P said in a Monday memo that the downturn in the group’s casino resort segment was “highly likely to continue”, pointing to intense competition in the Philippine market and inflationary pressure linked to the conflict in the Middle East. 

The institution lowered its estimate for annual earnings before interest, taxation, depreciation, and amortisation (EBITDA) contribution from the casino operation to around JPY10 billion (US$62.9 million) for the current fiscal year, similar to the prior year, and versus an earlier projection of JPY15 billion to JPY16 billion.

In December, S&P downgraded Universal Entertainment’s rating to ‘B-’, from ‘B’, on “prospects of slow recovery”.

The weaker outlook flagged in Monday’s report follows what S&P described as a significant impairment recognised by Universal Entertainment in fiscal 2025, amounting to approximately JPY220 billion, amid difficult operating conditions at the casino resort business.

The ratings agency noted that improvement in the conglomerate’s Japan-based pachinko and pachislot machine operations was unlikely to fully offset the softness in the Philippine resort business. 

Earlier this month, Universal Entertainment acknowledged that the Philippine gaming market continued to “face structural headwinds,” as the property’s first-quarter results “fell short” from a year earlier.

“We recognise that the gaming market in Entertainment City, Manila, Philippines, remains in a period of adjustment,” the parent said in its first-quarter earnings report.

“Against the backdrop of structural changes in the VIP market, fierce competition with rivals to acquire mass-market customers continues, driving up customer acquisition costs,” it added.

In mid-April, the promoter of Okada Manila said the complex recorded casino gross gaming revenue (GGR) of just under PHP6.47 billion (US$108.1 million) in the first three months of 2026, down 17.2 percent year-on-year.

The casino resort launched the “Okada Play” online gaming platform this month in partnership with gaming technology provider PhilWeb Corp.

The complex also announced the opening of “Ariake”, described as an exclusive gaming club designed specifically for Japanese VIP guests. The new gaming venue forms part of the resort’s strategy to strengthen its appeal to international premium players, the company noted.

In Monday’s memo, S&P’s analysts Kei Ishikawa and Hiroyuki Nishikawa wrote: “We believe the debt burden will remain very heavy due to weak companywide performance.”

According to the analysts, Universal Entertainment’s leverage profile remains stretched, with the analysts forecasting debt-to-EBITDA at around 10 times this year, compared with more than 11 times in fiscal 2025. 

The institution also flagged the possibility of pressure on liquidity, despite cash and deposits rising to about JPY40 billion at end-2025 following additional borrowings by the Philippine subsidiary.

According to S&P, annual interest expense is running at roughly JPY15 billion, while capital renewal spending at the Philippine resort could reach around JPY9 billion per year.

The analysts stated: “We therefore estimate that free operating cash flow will likely remain negative, and cash and deposits on hand are likely to further decline.”

Despite the negative outlook, S&P said near-term liquidity pressure appeared manageable, with less than JPY5 billion of debt maturing over the next 12 months from total long-term borrowings exceeding JPY130 billion.

The ratings agency said it could downgrade Universal Entertainment’s rating if cash flow recovery fails to materialise, particularly if free operating cash flow remains negative or consolidated cash falls below JPY25 billion. 

Conversely, the outlook could return to stable should profitability improve materially across both gaming machines and casino operations, accompanied by stronger liquidity and positive free cash generation. 

The reports said that Hitohisa Nakamura, the head of the Omura Chamber of Commerce & Industry, has asked Hiroshi Sonoda, Omura’s mayor, to be an advisor on a body referred to as the “Omura Bay Green IR Feasibility Study Promotion Council” due to be set up in August.

Per the reports, the mayor accepted the request and expressed his interest in proceeding with the discussion.

The business chamber plans to develop an IR concept for Omura, and suggest it to the prefecture by the end of the current calendar year.

According to media reports, the Omura Chamber of Commerce & Industry has made this move with the next IR application window of the national government in mind, i.e. between May 6, 2027 and November 5, 2027.

In 2024, a meeting organised by the Omura city branch of the Junior Chamber International – a worldwide organisation that promotes citizen engagement in economic and community matters – had expressed interest in Omura hosting an IR.

In 2021, before Sasebo had been selected as Nagasaki’s candidate location in the country’s first round of IR applications, Omura had been mentioned as a possible host site for a casino resort.

Omura city contains within its boundaries Nagasaki Airport, built on an island off the shore of Omura Bay, and a station of the Nishi Kyushu Shinkansen, part of Japan’s high-speed rail network.

Only Japanese prefectures and so-called ordinance-level cities are permitted to apply for the right to host an IR under the country’s casino liberalisation regime.

Although Nagasaki applied in the first round of bids, the prefecture learned in December 2023 that it had not been accepted, with the authorities citing doubts about the project’s funding.

The prefecture has given no public indication so far that it is interested in making a fresh bid.

The single successful candidate from Japan’s first round was Osaka prefecture and city. It is building with commercial partners MGM Resorts International and Orix Corp, the JPY1.51-trillion (US$9.49-billion currently) MGM Osaka, due to open in 2030.

“The company recognises the return of profits to shareholders as one of its important management priorities,” JCM stated.

As part of the new policy, the company said it was increasing both the interim and year-end dividend for the fiscal year ending March 31, 2027, resulting in an annual dividend of JPY46.0 (US$0.28) per share.

On Thursday, JCM announced a fresh medium-term management plan covering the fiscal years to March 31, 2029. The new plan is based on the group’s long-term development strategy, dubbed “Vision for 2032”.

Under the medium-term plan, JCM is targeting net sales of JPY39.00 billion in the fiscal year ending March 2027, which are anticipated to grow to JPY41.00 billion and JPY42.00 billion in the two following fiscal years.

Profit attributable to the parent is expected to grow from JPY2.30 billion in the current fiscal year, to JPY2.60 billion in the year ending March 2028 and JPY2.90 billion in the year to March 2029.

“The three-year period covered by the current medium-term management plan is positioned as a period for transforming the results of the ‘seed-sowing’ initiatives undertaken during the three years of the previous… plan into a solid earnings foundation for the commercial business,” JCM noted.

The firm stated: “Based on the stable earnings generated by the global gaming business, which is the… core business, the company aims to establish the commercial business as the next pillar of earnings.”

That would be done while “strengthening” each area of the group’s “business portfolio, capital allocation, human resources, and sustainability initiatives in order to maximise corporate value,” it added.

The key measures highlighted by JCM include: expansion of existing businesses; establishment of new earnings foundations; transformation of the business portfolio; disciplined cash allocation; enhancement of human capital; and advancement of sustainability management.

As part of the “Vision for 2032” strategy, JCM is targeting net sales of JPY55.00 billion, and operating profit of JPY5.50 billion.

JCM posted a net profit of just over JPY4.69 billion in its fiscal year to March 31, 2026. That was on net sales of JPY31.56 billion, down 16.6 percent from a year earlier. 

Operating profit for the latest financial year stood at nearly JPY2.50 billion, a 49.1-percent decline year-on-year. The firm declared a final dividend of JPY20.0 per share.

The prefectural authorities hosted late last month a third meeting of Hokkaido’s ‘IR expert panel’, according to GGRAsia’s correspondent in Japan. A representative of KPMG AZSA LLC attended the meeting, as the professional services firm has again been selected to advise the prefectural government.

The panel arrangement – featuring academics, and specialists in the field of gambling addiction – was formed against the backdrop of Japan’s announced second round for IR host-community applications, which will run from May 2027 to early November 2027.

At the meeting, the prefecture presented an interim summary of ‘The basic stance on IR of Hokkaido prefecture’ and ‘The Hokkaido-style IR concept’ and a timeline to finalise them.

The draft documents flag a total floor area of at least 100,000 square metres (1.08-million sq. feet) for the accommodation portion of any eventual casino resort to be hosted by Hokkaido. It also mentions a range of 2,300 to nearly 2,800 hotel rooms.

A key part of Hokkaido’s IR concept should involve “leveraging regional characteristics different from major metropolitan areas,” according to the reference materials issued by the prefecture.

Hokkaido’s particular IR facilities might highlight “nature, food, history and culture”, with reference to the seasons in Japan’s northernmost main island.

Hokkaido prefecture had expressed interest in hosting an IR prior to the first application round, but eventually dropped out of contention in late 2019, before the first round began.

KPMG had been advising Hokkaido prior to its decision regarding the first round, per GGRAsia’s correspondent.

Another meeting of the prefecture’s IR expert panel is due within this month. In June, Hokkaido is due to present a “preliminary draft” of its IR basic stance and of its IR concept, with those papers likely to be finalised by October.

Earlier comment by Hokkaido suggested that its IR-advisor partner will assist with research on the topic, including “interviews” with a selection of casino resort operators.

Such segmental revenue was up 1.0 percent year-on-year from JPY42.67 billion in the prior period, according to a Friday announcement.

Operating profit for the gaming and systems segment during the reporting period was JPY3.65 billion, down 50.4 percent year-on-year. Operating profit margin for the segment stood at circa 8 percent in the 12-month period, down from about 17 percent a year earlier.

The entertainment conglomerate’s gaming and systems division includes the supply of casino slot machines and casino floor-management systems. In October last year, the group also debuted its “Konami Online Interactive”, establishing iGaming as the “third pillar” in Konami Gaming’s businesses. 

In the casino gaming segment, Konami Group operates outside Japan via Konami Australia Pty Ltd and U.S.-based Konami Gaming Inc.

“In the gaming market, the North American and the Australian markets remained stable. The markets continue to experience the constant introduction of new products by competing slot machine manufacturers providing new placement opportunities,” the group stated in remarks accompanying the financial results.

The company said that in its slot machine segment, it released the Solstice 49C product, which the firm said was its “first new cabinet model in approximately six years,” and marked the debut of the Solstice series. 

In terms of gaming content, the supplier said content for the Solstice series cabinets – including the Bomberman series featuring Konami’s signature intellectual property – “maintained high performance”. 

“In the Australian market, the Bull Rush Stampede series has gained popularity,” the firm added.

For the group’s casino management system, “the number of facilities adopting Synkros has been increasing, driven by installations at casino facilities in California and New Mexico in the U.S., as well as on cruise ships,” it said. 

“We expanded the feature of Synk Vision, the player facial recognition solution for slot machines, to table games. This will further improve convenience for both casino operators and players,” Konami stated.

For the gaming and systems business, Konami said it expected revenue of about JPY46.0 billion for the financial year ending March 31, 2027, according to Friday’s announcement.

The group forecasts operating profit of JPY6.5 billion for the full financial year ending in March next year.

Konami Group is also involved in the Japan-focused pachinko games segment, as well as digital entertainment – including video games and mobile games – and sports.

Group-wide revenue for the 12 months to March 31 rose 17.1 percent year-on-year, to nearly JPY493.68 billion.

Profit for the whole Konami Group in the period stood at nearly JPY100.01 billion, an increase of 33.9 percent year-on-year.

The company announced a final dividend of JPY138.50 for the financial-year to March 31, to be paid on June 4. That was an increase from JPY107.50 a year earlier.