GGRAsia – MGM-Orix sole qualified partner for Osaka in its IR effort

MGM-Orix sole qualified partner for Osaka in its IR effort

Feb 15, 2020 Newsdesk Japan, Latest News, Top of the deck

A consortium consisting of United States-based casino operator MGM Resorts International and Japanese financial services group Orix Corp has been identified as the sole qualified applicant to partner the city and prefecture of Osaka (pictured) in its tilt to get a casino complex or “integrated resort” (IR) as they are known in that country.

The prefectural government gave the news in a statement on Friday, the last day for interested parties to submit proposals for a request-for-proposal process for an Osaka IR.

The MGM Resorts-Orix consortium is said to be the only such qualified applicant identified. The Nikkei news outlet reported that the Osaka authorities were likely to make a final decision in June regarding a private-sector partner with which to pursue such an IR scheme.

The central government has said up to three casino licences will be permitted in Japan in the first round of liberalisation.

The Osaka authorities announced in late November the names of the three private-sector firms that had remained engaged in its request-for-concept process for an IR. They were: the MGM Resorts-Orix consortium; the Japan unit of Galaxy Entertainment Group Ltd; and Genting Singapore Ltd, a unit of Malaysian-based Genting group.

The MGM Resorts-Orix consortium had already confirmed to GGRAsia it would take part in the Osaka RFP process.

The local authorities had previously confirmed that an area of 49 hectares (121 acres) in Yumeshima – an artificial island (pictured) offshore from the downtown area – was the selected site for an Osaka tilt at a casino resort. Osaka is in the populous Kansai region of Japan’s largest island, Honshu.

The Osaka authorities have been trying to push ahead with ambitions for such a project – which must be first approved by the national government – even though the central authorities have delayed publication of their so-called “basic policy” on IR matters.

The IR policy appears to have divided public opinion in Japan, and its cause has also had some public relations issues recently amid allegations that bribes were paid to some Japanese lawmakers – including a former cabinet adviser on the IR policy, Tsukasa Akimoto – by a Chinese firm seeking a casino licence in Hokkaido prefecture.

James Murren, chairman and chief executive of MGM Resorts – who has been leading the group’s efforts to get casino rights in Osaka – is to step down from his post once a suitable replacement is found, the firm said on Wednesday. His current contract had been due to run until the end of 2021.

But Mr Murren stressed in a conference call following the group’s fourth-quarter and full-year earnings announcement that day, that he would in the interim continue to be closely involved in the group’s efforts in Japan.

He has previously said that such a project might cost as much as US$10 billion to realise in Japan.

MGM Resorts is the parent of Macau casino operator MGM China Holdings Ltd. In the Macau market, all casino business is currently suspended due to the novel coronavirus alert in that city and across China. On Friday it was announced that the hotel at MGM China’s MGM Macau property in downtown Macau would temporarily be closed to paying guests.