GGRAsia – More non-gaming assets would up Osaka IR rev: consultancy

More non-gaming assets would up Osaka IR rev: consultancy

Jun 15, 2023 Newsdesk Japan, Latest News, Top of the deck

Japan-based business consultancy Resona Research Institute Co Ltd says the addition of a theme park and marine leisure facilities, as well as of a large-scale commercial space, to Osaka’s planned casino resort (pictured in an artist’s rendering) would help double the property’s expected non-gaming revenue.

The firm released on Tuesday a report stating that if the Osaka integrated resort (IR) followed the ‘Singapore IR model’, adding commercial, theme park and marine leisure facilities to its already-planned non-gaming offering, the property could generate annual non-gaming revenue of “at least JPY250 billion” (US$1.77 billion).

The consultancy added that the increase in non-gaming assets would also drive more foreign visitors to the property. Boosting international tourism was a stated policy aim of the Japanese national authorities for legalising casino gaming in the country.

The Osaka authorities hope to open a casino resort in partnership with United States-based gaming operator MGM Resorts International and Japan’s Orix Corp in 2029. MGM Resorts has described the scheme as a “US$10-billion” project.

The MGM Resorts-Orix consortium has forecast that the property could generate JPY520 billion in revenue per year by 2031. That would include JPY420 billion in gaming revenue and JPY100 billion in non-gaming revenue.

Resona Research Institute suggested in its report that the addition of large-scale commercial facilities to the Osaka IR project could lead to an increase in annual non-gaming revenues of JPY100 billion. A theme park could push revenue up by JPY40 billion, while the contribution of marine leisure facilities was forecast at around JPY20 billion.

According to a presentation by MGM Resorts last month, part of its first-quarter 2023 earnings announcement, the Osaka integrated resort is to include a total of 2,500 hotel rooms, plus “dining and food and beverage offerings, retail space, spa, fitness centre, and banquet halls.”

The property will also include a theatre, circa 400,000 square feet (37,161 sq metres) of conference facilities, and 330,000 square feet of exhibition space.

MGM Resorts said the scheme was expected to welcome circa 20 million visitors per year, served by a projected 15,000 employees.

Osaka’s IR District Development Plan was approved in principle in April by the national authorities, with just under 66 percent of the available assessment points.

The governor of Japan’s Osaka prefecture said in May the local authorities and the MGM Resorts-Orix consortium would have ready by September in draft form a project implementation agreement for the casino resort scheme.

The draft of the agreement would include a development timetable, said Hirofumi Yoshimura at the time.

Bill Hornbuckle, chief executive and president of MGM Resorts, said in early May the scheme would “probably” open in the “first quarter [or] second quarter of 2030”, instead of 2029, as originally forecast.