Osaka IR by 2025 hard, not impossible: Murren
It would take “almost surgical precision” in terms of the private sector working with local government, to get an Osaka casino resort built in time for the World Expo 2025. So said Jim Murren (pictured in a file photo), chairman and chief executive of MGM Resorts International, speaking at the Strategic Decisions Conference 2019, hosted by brokerage Sanford C. Bernstein and Co LLC.
Referring to the Osaka request for proposal stage, which he said might be decided by this time next year, thanks to Osaka’s commitment to having a casino integrated resort or “IR” as they are known in Japan, Mr Murren said: “Whoever wins is going to have their work cut out, because the goal is to try to get the IR open in time for the World Expo in 2025.”
The MGM Resorts boss added: “It requires almost surgical precision, not just by the developer, but by the government; from a permitting perspective, from an infrastructure perspective. It’s certainly not impossible.”
But he said Osaka’s bullishness might allow it to happen.
“Osaka was the only city, the only prefecture that early on said ‘we absolutely want to host an IR bid’,” he noted.
“I’ve been all round the country for five years, and although there are great potential host locations, we decided early on to pick Osaka,” the chairman noted.
Inbound tourism would “go up profoundly” if an IR were built there, he stated. Although he noted that casino suitor firms in any of the three locations to be allowed in the first phase of market liberalisation would “have to win twice: once at prefecture level and once at the national level”.
There are seven entities that have expressed interest in Osaka – including MGM International’s market rival Las Vegas Sands Corp – via a request for concept phase that launched in April.
“Both Osaka and Tokyo are woefully underserved from a room and a MICE perspective,” stated Mr Murren, referring latterly to meetings, incentives, conferences and exhibitions business.
Mr Murren was asked for his views on the fact Japan was likely to be a very closely regulated casino market.
MGM Resorts is the parent of Macau casino operator MGM China Holdings Ltd. In the Macau market, VIP play fuelled by external junkets is a major factor in casino earnings
He stated regarding Japan: “We are not at all troubled by the rules that have been laid out. We actually find them to be competitively favourable to us. We don’t prefer the junket model, so we’re not concerned that the junket model will not exist in Japan.”
The chairman asserted however he was “not going to share” forecasts on earnings before interest, taxation, depreciation and amortisation, or revenue.
But he stated: “I can’t think of an opportunity in the world today with as potentially high a return on investment: even given everything we know – construction costs; regulations; taxes; gaming restrictions; entry fees… it is an extraordinary opportunity.”
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