GGRAsia – Hard to open Osaka IR in 2029 if no govt nod soon: MGM

Hard to open Osaka IR in 2029 if no govt nod soon: MGM

Feb 09, 2023 Newsdesk Japan, Latest News, Top of the deck

The chief executive of casino operator MGM Resorts International says the group will be “challenged” in terms of a previously-stated aspiration to open a Japan gaming complex by 2029, “if we don’t hear soon” from the authorities there.

MGM Resorts and local partners, including Orix Corp, have been selected as preferred private-sector providers for a planned JPY1.08-trillion (US$8.25 billion at current exchange rates) casino resort in Osaka.

The update on the timetable for the scheme (pictured in an artist’s rendering) was given by Bill Hornbuckle, CEO and president of MGM Resorts, on the firm’s fourth-quarter earnings call on Wednesday.

He also stated: “Inflation has not hit Japan like it has in other places, and particularly for us, at our end of the partnership, the value of the [Japanese] yen has gone tremendously in our favour, but we’re still looking at a US$10 billion project. We’re looking at a return on that project, we think can bring 15 percent plus in cash flow.”

Mr Hornbuckle told analysts regarding project timing: “As you may recall, we also submitted our RFP [request for proposal] in Japan for an integrated resort licence to operate in Osaka approximately 10 months ago. Unfortunately, I’m still waiting for the response from the government, but we are being patient and believe we will hear soon.”

He added: “We had hoped to hear in October. Obviously, we sit here now in February not having heard. The process lies today with MLIT [the Ministry of Land, Transport and Infrastructure], the government agency that is going through and consistently asking us questions about the project, about the contract with the government of Osaka, etc.”

“Time to tell whether we get through that efficiently over the next 30 days. We would like to think and believe we might, but we’ve been thinking that for a while now,” the executive further stated. “We’re going to be challenged with that, if we don’t hear soon, to get this thing open before the decade close in 2029.”

The group had previously said that it hoped to hear from Japan’s central government by the autumn of 2022, whether it would approve the so-called Integrated Resort (IR) District Development Plan that had been submitted to the authorities in April that year.

In November, Ichiro Matsui, mayor of Osaka, said the local authorities – the city and prefecture are joining forces on the IR tilt – had been asked by the national government to submit additional documents explaining how and when the local authorities would resolve issues linked to their proposal, including the land at Yumeshima island in Osaka Bay, on which it will stand.

Japan’s Ministry of Land, Infrastructure, Transport and Tourism is the public department overseeing scrutiny not only of the Osaka plan, but also a casino-resort proposal for the prefecture of Nagasaki.

A politician representing Osaka in the national parliament has been among voices calling recently for prompt feedback from the national authorities.

On Wednesday, it was announced that Mayumi Taniguchi, a law scholar opposed to Osaka’s IR policy, would stand for the governorship of Osaka in elections scheduled for April.

According to information collated by GGRAsia’s Japan correspondent, she will be supported by a newly-formed anti-casino political group called Update Osaka.

Osaka’s incumbent governor, Hirofumi Yoshimura, a supporter of the IR policy, said in December he would run again for the post.