Osaka is a natural place for a casino resort, because the city has a reputation for good food, landmarks, and entertainment.
MGM Resorts International is focusing its attention on securing an Osaka casino license. MGM Resorts CEO Jim Murren spoke of his company’s interest in Osaka during a full-year earnings calls with financial analysts last Wednesday.
In the conference call, Murren told the financial experts, “We just recently opened up an office in Osaka. We’ve committed now to the mayor and to the governor of Osaka. MGM has adopted an Osaka-first strategy. We are focusing our considerable resources on Osaka.”
Though he stopped short of saying MGM Resorts was all-in on the Osaka bid, he did say that the companies “energies” would be focused on an “Osaka-first” strategy. Osaka is the second largest city in Japan behind Tokyo, while Keihanshin region is the second largest metropolitan area in Japan.
Keihanshin combines Osaka, Kobe, and Kyoto, which combines to include over 19 million people in the metropolitan area. This gives the Osaka and its sister cities roughly 15% of Japan’s total population. With Tokyo not applying for a casino license, it is the biggest city MGM Resorts could target for a gaming license.
Jim Murren on Osaka Casino Concession
Jim Murren believes Osaka will be the first casino license granted, likely sometime in early 2020. During the conference call, Murren said, “Our guess is that an operator will be selected by Osaka by early 2020. The next step for Osaka or any other jurisdiction is to go to the central government.”
“We think Osaka will be one of the three concessions that will likely be granted, but we know the central government has to select Osaka and its operator.”
“That probably happens maybe 12 [or] 18 months after Osaka itself picks its operator. Osaka’s goal is to have an IR opened by 2025. That’s when the World Expo is in Osaka.”
Osaka IR Basic Plan
Osaka’s leaders view their city as the premier destination for a casino. The city’s leaders have held 9 different conferences to discuss the plan. In their “Osaka IR basic plan”, which was released in early February, the city leaders called for a casino operator to invest $8.5 billion in any integrated resort project it plans.
The Osaka IR basic plan, which is said to be a “guideline” for casino developers, would include 148 acres of land and a grand opening date of 2024 (though Murren thinks 2025 is their projected start date). The 2024 opening date is thought to be optimistic, as a Japanese government official earlier said 2025 was the earlier a grand opening could happen.
Osaka is known for its unique attitude towards work and life, though, so its leaders likely would try to be the first casino city to open a resort. At one time, some gaming analysts talked of locating all of Japan’s integrated resorts in Osaka, in order to create an “Osaka Strip”. This plan eventually was scrapped because a more dispersed casino industry looked as if would generate more revenues.
Lawrence Ho, Sheldon Adelson
Given Tokyo’s abdication in the first wave of casino developments, Osaka appears to be in a position to play off the top casino companies in the world against one another. Lawrence Ho Yau Lung, the CEO of Macau gaming company Melco Entertainment, said Osaka is positioned to be the top casino destination in Japan.
Lawrence Ho also indicated he would seek a casino license in Osaka, after once saying he would pay “whatever it takes” to secure a Japanese casino license. Ho even suggested he would move Melco’s headquarters to Japan if he won a license.
Sheldon Adelson of Las Vegas Sands Corp. also is said to be interested in Osaka. Adelson pledged to spend $10 billion to win a Japanese casino license, though he later backed off those remarks when the rigid terms of the Integrated Resort Implementation Bill were released. It is not know how much the LVS chief executive now would invest in Japan.
Osaka Casino Licensing Decision
The competition for the Osaka casino license will be a clash of titans. Behind its world famous Venetian Macau in China and Marina Bay Sands in Singapore, Las Vegas Sands Corporation is the largest casino company in the world. Melco, which boasts famous resorts like City of Dreams Macau, Studio City, and City of Dreams Manila, is another giant of the Macau casino industry.
So is MGM Resorts International, for that matter. MGM Resorts is famous for Las Vegas Strip casinos like MGM Grand, Bellagio, and Mandalay Bay. Even at that, its Macau casinos — MGM Grand Macau and MGM Cotai — are tremendous revenue sources for the company. MGM Resorts also owns Borgata in Atlantic City, MGM National Harbor in Maryland, MGM Springfield in Massachusetts, and Beau Rivage Casino along Mississippi’s Gulf Coast.
Jim Murren discussed the challenge of securing an Osaka casino license, but also highlighted the company’s many other pursuits at the moment. Talking to the financial analysts, Murren added, “We also remain committed to targeted growth opportunities such as sports betting and the pursuit of an integrated resort in Japan. Importantly, we will continue to prudently allocate capital, with a focus of returning excess cash to shareholders.”
