Five years after gambling was legalized, construction begins on Japan's first casino
Japan, which legalized commercial gambling in July 2018, has as many as three integrated resort casinos (IR). Nearly 2,000 days later, the first phase of the project officially started construction.
MGM Resorts International, through its joint venture with Japanese financial services group ORIX Corporation, signed a Formal Investor Relations Development Plan with the City of Osaka and Osaka Prefecture in late September. MGM and ORIX jointly own 42.5% of Osaka IR Corporation, with the remaining 15% controlled by small investors including Panasonic, Kansai Electric and West Japan Railway.
Osaka-based IR Corporation officially began construction on its 1.27 trillion yen ($8.6 billion) site preparation project in Yumeshima on Wednesday, The Japan Times reported. Yumeshima is an artificial island in Osaka Bay that will host the 52nd hectare casino resort. . The island covers an area of nearly 700 hectares and is mainly used as a container port.
Before the first piece of steel penetrated about 70 meters into the bedrock, workers consolidated the overlying terrain to support a project like this. Site preparation costs are expected to be $173 million. Osaka IR Co., Ltd. is financing the land preparation work, but the Osaka city government has promised to compensate the company upon completion of the resort.
Years of Delay
When Japan passed its casino law in July 2018, the country attracted the attention of nearly every major casino operator in the world. At the time, the "Land of the Rising Sun" was considered the largest open market since Macau, China, at the turn of the century.
In addition to MGM, casino giants that have expressed interest in one of the three casino licenses include Las Vegas Sands, Caesars Entertainment, Wynn Resorts, Hard Rock International and Mohegan Sun. The slow regulatory progress after Japan's casino law was passed caused these companies to lose a lot of enthusiasm.
The COVID-19 pandemic has further slowed down Japan’s national committee in finalizing casino regulations and bidding procedures. Sands and its founder and CEO Sheldon Adelson had finally had enough, and shocked the global gaming industry in May 2020 by announcing they were no longer considering locating the company in Japan.
Sands was then the world's largest casino operator by gambling revenue and considered a frontrunner for one of Japan's three licenses. Adelson, who died in January 2021, said at the time that the environment in Japan "made it impossible to achieve our goals there."
Many other companies followed Sands' lead and abandoned Japan, but MGM remained steadfast in its commitment to Osaka.
MGM Osaka
MGM's Osaka IR will open three hotels under three different brands offering approximately 2,500 rooms. The complex will have 730,000 square meters of meeting space and attractions "showcasing the best of Osaka and Japan".
Based on the Gambling Act 2018, gaming area at MGM Osaka is limited to 3% of the total IR indoor area. Osaka IR Co., Ltd. aims to open in 2030.
Japan has just one other outstanding IR bid. It comes from Austria Casino in Nagasaki. The gaming company hopes to build an IR casino worth about $3 billion at the Huis Ten Bosch theme park in Sasebo.
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Source: www.casino.org
