Ed Bowers (pictured), president global development at casino operator MGM Resorts International, says the company has reached a new milestone, after being certified by the national government in Japan to develop a casino resort in Osaka.
The Osaka metropolis got its bid to host such a facility approved by the central authorities in April this year, and the project might open in the first half of 2030. The venture has been described as a US$10-billion scheme.
A unit of MGM Resorts is 40-percent equity partner in the integrated resort (IR) venture, with Japan’s Orix Corp also on 40 percent. The remaining 20 percent is shared between a number of other Japanese investors.
“We probably have another six or seven years to go before opening, so it’s going to be about a 20-year journey” in Japan, stated Mr Bowers, who is also president and chief executive of MGM Resorts Japan LLC.
“We moved on to a new milestone, and the next milestone includes finalisation of agreements, finalising the design, and then construction of the project,” he said during a conference panel on Tuesday, on the first day of the Global Gaming Expo (G2E) Asia event in Macau.
“I think Japan is a sufficiently large [market] and attractive, to provide a reasonable return to what is now a very high investment,” stated the executive.
He added: “What used to cost US$1billion [to build], now costs US$10 billion. So, you really can’t build these things [projects] anymore in places that are small; you have to find locations where you can afford to spend US$10 billion, where the market is sufficiently large for you to generate sufficient cashflow and make a reasonable return on investment.”
Mr Bowers described Osaka as a “terrific location”, given the large number of people living within a three-hour flight of that city, as well as the number of airports close to it, and the “significant” volume of international travellers to the city, including the number of visitors from South Korea and China.
“These are going to contribute to the success of the IR in Japan,” he noted.
Regarding hurdles to tackle during coming years, Mr Bowers said one “major challenge over the next six or seven years is going to be hiring and training a significant number of people, anywhere between 10,000 to 15,000 people”.
He said his team was working on “building a robust plan” for hiring and training people. “We fully believe that we can get this done,” said Mr Bowers.
Other factors to take into consideration would be regulation, since this would be a “new industry, with new regulators” in Japan.
“There’s a lot to learn about our industry. I’m hopeful … that we can make the regulations as efficient as possible, but still maintain the kind of level of stringency, safety and security that the Japanese government wants,” stated Mr Bowers.
Asked about MGM Resorts’ view on Thailand, as the authorities there discuss the possibility of casino legalisation, Mr Bowers said time would tell if that was feasible. But the MGM Resorts president for global development said the company would not be minded to rush into that market.
If Thailand moves forward, and the structure and related policy make sense, “I think everyone will jump in,” said the executive.
“But MGM has been accused in the past of jumping too early; we’re not going to jump in too early this time, only when and if it’s necessary. We have plenty of other things to do,” he added.
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