MGM Resorts Int. & Orix Corporation Win Osaka IR Bid

The prefecture and municipality of Osaka city in Japan have chosen MGM Resorts International and its partner Orix Corporation – a financial services company- to be the official flagbearer of the region’s integrated resort (IR) pursuit. The duo had tabled a $9.1 billion bid for the casino-centered IR to be constructed on Yuhemina island, a man-made island in Osaka Bay.

It’s worth pointing out that the MGM-Orix team-up went into the final round for the Osaka Request for Proposal (RFP) process unchallenged. Other prominent gaming companies, including Wynn Resorts Ltd, Las Vegas Sands Corp., and a handful of other Asian casino operators, quit the race in 2020. So, it’s not like Osaka had much of a choice in the matter.

Nonetheless, MGM Resorts CEO and President Bill Hornbuckle welcomed the news in a statement:

Quote

“It is an honor to be selected as Osaka’s partner in developing an integrated resort. I commend the city in undertaking a comprehensive and thoughtful process to meet its goal of developing a world-class integrated resort in Osaka. We will work closely with prefectural/city municipal governments to deliver an iconic, uniquely Japanese destination warranting Osaka’s selection as home to one of Japan’s first integrated resorts.”

Touching on the promising future of Japan as a gaming hub, Hornbuckle also touted Osaka’s strategic location, saying:

Quote

“Nowhere is the future of tourism and hospitality more exciting than Japan, and Osaka is the perfect location for that future to begin. We couldn’t be more excited for the opportunity to help enhance and grow Osaka’s reputation as a world-class destination and gateway for the world to the wonders and rich history of Japan.”

MGM Resorts Has Big Plans for the Osaka Integrated Resort Facility

MGM and its IR partner Oryx have already shared plans of the IR with Osaka’s government, and from the look of things, it’s going to be a beauty. The proposed resort will have a casino as the main attraction, alongside a conference facility whose capacity stands at over 6,000 people – covering about 400,000 square feet. There will also be a 330,000 square feet space for exhibition in the facility, plus an accommodation section housing 2,500 guest rooms occupied by MGM Osaka, MGM Villas, and MUSUBI Hotel.

According to estimates, this IR proposal will create approximately 15,000 new employment opportunities. Additionally, it is expected to garner roughly 20.5 million visitors every year, with 14 million of them being local tourists, whereas the remaining 6.5 million will come from overseas. All this activity is projected to generate about $4.9 billion in annual revenues.

MGM Resorts International and Orix Corporation will have an equal partnership for this IR consortium, with each party holding 40% ownership. The 20% equity left is expected to be picked up by various other partners, each taking a small fraction of the remainder.

The Net Steps for Japan’s Integrated Resort Endeavor

With Yokohama out of the IR race after the city’s residents elected a new anti-gambling mayor in August, the Japan IR venture is left with only three assured candidates, i.e., Osaka, Wakayama, and Nagasaki. With no other contenders in the race, all three cities will receive a casino license if the process continues smoothly.

In June, Wakayama was the first to select its IR partner after taking up Clairvest Neem Ventures Co Ltd, owned by Toronto-based private equity firm Clairvest Group Inc. About a month later, in August, Nagasaki chose Casinos Austria International as its IR operator partner.

Now that Osaka has picked its partner, the next step in Japan’s 2018 Integrated Resort Implementation Act is for the prefectures of the three cities to pen joint applications to the national government for official licensing. After that, the central government will likely issue the Integrated Resort licenses to the three cities in 2022.