GGRAsia – Pausing MGM Osaka may threaten cost, 2030 launch: reports

Pausing MGM Osaka may threaten cost, 2030 launch: reports

Aug 07, 2024 Newsdesk Japan, Latest News, Top of the deck

Osaka IR KK, the entity that is developing the MGM Osaka casino resort in that Japanese metropolis, has according to media reports told the local authorities that were they to pause work for six months while Expo 2025 Osaka, Kansai, Japan is held nearby next year, it would lead to a delay in the projected mid-2030 opening of MGM Osaka, and extra costs.

The integrated resort (IR) with casino scheme is budgeted at JPY1.27 trillion (US$8.66 billion currently).

The Asahi Shimbun news outlet had reported at the weekend that the Bureau International des Expositions (BIE), the overseeing body for Expo 2025, had asked for the pause on work at MGM Osaka during the event, on the basis of noise mitigation and landscape appearance.

Kansai TV, a local television news service, produced a Monday report citing unnamed Osaka IR KK sources as saying the developer was “surprised” and “worried” about the pause request.

The report, according to GGRAsia’s Japan correspondent, cited Osaka prefecture governor, Yoshimura Hirofumi, saying: “From what I’ve heard from the IR operator, not only will it have a big impact on the opening date, but if various construction works are to be [temporarily] dismantled at once, it will also affect the project costs.”

But the governor also acknowledged there were “strong opinions” on the matter, and that he had asked the developer to consider taking the “maximum possible” mitigation measures.

According to Tuesday reports, talks on the matter are ongoing.

GGRAsia has approached MGM Resorts Japan LLC and the parent company of project backer United States-based MGM Resorts International for comment on the matter, but has not so far received replies.

MGM Osaka is a project between MGM Resorts, Japan’s Orix Corp, and a number of minority local investors.

Expo 2025 is to be held for 184 days from April 13 to October 13 next year on Yumeshima, an artificial island in Osaka Bay, that is also the location of the MGM Osaka site.

Based on other information collated by GGRAsia’s Japan correspondent, Osaka’s IR District Development Plan – updated on April 19 – sets out the construction schedule for the property.

It mentions that on December 4 last year, Osaka IR KK initiated anti-liquefaction measures for the site.

On July 31, during MGM Resorts’ second-quarter earnings call, Bill Hornbuckle, chief executive and president, had stated he had recently returned from Japan and that the MGM Osaka project had been “moving along nicely”.

He added: “We are in the ground as we speak and we hope to start piling by May or June of next year, with a target date still of middle of 2030 for opening.”

MGM Resorts already has Asia casino interests as the majority owner of Macau casino operator MGM China Holdings Ltd. Mr Hornbuckle had also mentioned on the July 31 call, that any pursuit of an investment opportunity in Thailand if it legalises casino business would be via MGM China.