Osaka welcomes MGM Resorts and Orix for Japan’s first casino

Lea Hogg 7 months ago
Osaka welcomes MGM Resorts and Orix for Japan’s first casino

MGM Resorts and Orix Corporation reached a pivotal agreement with Osaka Prefecture and Osaka City, advancing the development of Japan’s eagerly awaited casino project. The collaborative effort, carried out through the Osaka IR Corporation – a joint venture between MGM Resorts and Orix Corporation – solidified plans for an integrated resort on Yumeshima Island in Osaka.

While the casino itself had already received approval, this meeting was convened to determine the precise location and plan for the comprehensive tourist facility within the Osaka-Yumeshima area. The signing of the agreement took place at the Osaka Prefectural Sakishima Government Building, with representatives from all involved parties present.

The signatories of this significant agreement included Hirofumi Yoshimura, Governor of Osaka Prefecture (in photo on the right), Hideyuki Yokoyama, Mayor of Osaka City and Bill Hornbuckle, CEO and President of MGM Resorts International, (in photo on the left).

Bill Hornbuckle expressed his sentiments, stating, “This marks a momentous occasion for our company as we conclude the certification process and shift our focus towards realizing our vision in partnership with Orix – to construct a world-class integrated resort in Osaka. We are unwaveringly committed to this endeavor and eagerly anticipate delivering top-tier gaming, entertainment, dining, and retail experiences to Japan and Osaka. Our aspiration is to bring MGM’s signature ‘wow’ factor from Las Vegas to Osaka and create a resort that will instill immense pride within the community.”

Nationwide poll

The area is known as the Specified Integrated Resort Facilities Area Development Plan and this venue is the pioneering establishment of its kind in the country.

Japan’s gambling industry has recently experience significant attention, with the country having passed legislation a few years ago, but only greenlighting the opening of its inaugural casino in April.

It is estimated that the casino project will receive an investment of JPY¥1.8 trillion (US $13.5 billion), with MGM and Orix both holding a 40 percent stake in the venture. The remaining 20 percent ownership will be distributed between local Osaka-based companies, including those involved in the railway and electric power sectors.

In 2018, a nationwide poll revealed that 27.6 percent of respondents in Osaka supported the casino plans. Public opinion changed and in 2022 a new poll by Nikkei business indicated that 45 percent of residents favoured the new resorts constructrion, indicating an increase of 28 percentage points in favour of the new casino. (Source SiGMA)

Background of historic decision

Six months ago, SiGMA News reported that Japan had made a historic decision to greenlight its first-ever casino complex situated on the artificial island of Yumeshima, featuring a hotel and wide array of amenities like restaurants, conference facilities, exhibition spaces, shops, spas, a theatre and entertainment outlets. This decision, however, stirred a mix of anticipation and controversy at the time. On the positive side, it promised a boost in tourist spending, but concerns arose regarding the potential for increased gambling addiction and organized crime.

Support groups for gambling addiction expressed “grave concerns,” citing a surge in requests for help from young individuals addicted to online gambling. To address these worries, Japanese citizens were to pay a 6,000 yen fee for every 24 hours spent in the casino, with a portion of the fee allocated to combat gambling addiction.

Showcasing the charm of Japan

In April this year, Prime Minister Fumio Kishida anticipated that the complex would stimulate development in the broader Osaka region and serve as a tourism hub to showcase Japan’s charm to the world.

Japan’s gambling market, estimated at US $20 billion annually, could see substantial growth with the construction of three casino complexes. Leading casino operators had been lobbying for the approval of the first complex, anticipating significant profits and increased tax revenue for Japan’s government.

Japan, as the world’s third-largest economy, previously maintained a ban on casinos. The approval process was championed by Kishida’s Liberal Democratic party, which dedicated years of effort to securing it. In 2016, a law was passed to legalise the gambling industry, followed by legislation allowing the construction of purpose-built integrated resorts like the forthcoming Osaka complex.

Over 20 local firms confirmed that they would play roles as subcontractors.

The Osaka government predicted that the project would generate 15,000 jobs and attract up to 20 million visitors annually, both from Japan and abroad. Sales revenue was expected to exceed 520 billion yen, with 80 percent stemming directly from the casinos. Japan, known for its avid gamblers, has already seen a substantial increase in revenue from publicly run racing events and pachinko parlours.

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