GGRAsia – MGM Osaka to open 1H2030, break ground maybe still 2023

MGM Osaka to open 1H2030, break ground maybe still 2023

May 02, 2023 Newsdesk Japan, Latest News, Macau, Top of the deck

U.S.-based casino operator MGM Resorts International says it should only be able to open its integrated resort (IR) in Osaka – Japan’s first and, so far, only approved casino property – in the first half of 2030. The company expects to break ground on the project still this year, according to management.

“Probably it will open first quarter, second quarter of 2030,” said on Monday Bill Hornbuckle, chief executive and president of MGM Resorts. That contrasted with a previously-stated aspiration to open the gaming complex by 2029.

He added that the firm and its Japanese partner Orix Corp needed to complete land lease and other agreements with the Osaka authorities before moving ahead with the project.

“Presuming this or next quarter those [deals] will get done… we are looking to break ground either late this year or first part of next year,” stated Mr Hornbuckle. “We look forward to getting started on this major development, to increase our global reach and fulfil our strategy to increase our geographic diversification.”

He was speaking during an investor conference call after the announcement of the first-quarter results of MGM Resorts, the parent of Macau-based casino operator MGM China Holdings Ltd.

Japan’s central government approved last month the so-called IR District Development Plan of Osaka in relation to a tourism complex with casino, to be developed by a consortium including MGM Resorts and Orix.

The Osaka facility will be at Yumeshima, an artificial island in Osaka Bay, that will host the World Expo 2025.

MGM Resorts has described its casino resort complex as a “US$10 billion” project. In Monday’s conference call, the firm’s management confirmed it planned to resort to bank financing to help pay for construction.

Last month, the newly re-elected governor of Osaka prefecture, Hirofumi Yoshimura, reaffirmed Osaka’s aim of “targeting to open an IR in 2029″. But MGM Resorts had already signalled in February that could be hard to achieve.

‘Significant recovery’ in Macau

In his Monday remarks, Mr Hornbuckle also discussed the “significant recovery” in first quarter results at MGM China. He said the firm was “experiencing a rapid recovery, on the lift of public health policy restrictions” in Macau; the positive trends had continued into April, the executive stated.

According to the group CEO, MGM China’s adjusted property earnings before interest, taxation, depreciation, amortisation, and restructuring or rent costs (EBITDAR) in the first quarter of this year were already 88 percent of 2019 levels, prior to the Covid-19 pandemic.

“Our market share was 15 percent during the quarter and we are confident in our ability to sustain share,” he told the conference call.

MGM China’s president and chief operating officer, Hubert Wang Zhi Qi, said during the conference call that daily mass gross gaming revenue at the firm’s properties had “already exceeded” 2019 levels, with the trend continuing into April. “In terms of mass, we are already 115 percent of 2019 mass level,” he added.

Mr Hornbuckle stated that MGM China was still only using around half of the additional 200 gaming tables it had gained as part of last year’s gaming concession renewal process. “The remaining will be added as demand returns and we complete further refurbishments on the casino floors,” he said.

The MGM Resorts CEO also talked about a Dubai project the firm is involved in, admitting it could eventually include gaming. “The owners yet again want to upgrade the property, I think with gaming in mind,” he said, adding that the firm was also looking at related developments in Abu Dhabi.

Rival U.S.-based casino operator Wynn Resorts Ltd is developing a US$3.9-billion Middle East casino complex, to be called Wynn Al Marjan Island. It is presented as the first major resort in the United Arab Emirates to offer casino gaming.