Osaka, Japan - MGM Resorts Japan CEO Ed Bowers recently announced that they are submitting a proposal for a resort casino license in one of Japan’s major cities, Osaka. The application process officially began on April 25 and will be open until May 24.
Although Bowers did not reveal details regarding the proposal’s content, he did say that they have partnered with Japanese financial services group ORIX for the application, but their partnership is not exclusive. This would mean other corporations operating within the city could still join the project as minority partners.
Casinos in Japan
Casinos were illegal in Japan for many years, which was understandable, considering their staunchly anti-gambling culture. Things only changed in 2016, when the Japanese legislature finally legalized casinos after over 15 years of debate. And it was only towards the end of 2018 when it also became legal to operate resort casinos.
Only three licenses for resort casinos that are up for grabs, which is why MGM isn’t wasting any time and has started the process of securing one of those licenses. There are some strict requirements that need to be fulfilled in order to get a license. The proposed project should have a large-scale hotel, should have exhibition space and convention capacity, should act as a tourism gateway to other Japanese regions, and should attract people to Japan and its culture.
Besides fulfilling the requirements, proposals should also outline countermeasures that seek to address problem gambling, and indicate how the operator plans to address community safety issues. The government is already implementing a ban on casino ads, except in a few place, such as international airport terminals. They expect resort casino operators to do their part in ensuring safety and combating problem gambling.
MGM Joining the Fray
It makes sense for global casino operators like MGM to show significant interest in obtaining the licenses. After all, these resort casinos are expected to be highly lucrative operations and Japan is set to become a major player in the Asian gambling scene. And although no cities have yet been chosen, nor have licenses been granted, Osaka is almost guaranteed to get one, as it is a tourist hotspot and is scheduled to host the 2025 World Expo.
The tie-up between MGM and ORIX is the first partnership to be announced between a domestic company and an international casino operator. And this partnership fits perfectly into the “Osaka First” policy that MGM has recently announced. They have decided to focus all their energy on Osaka, and they have just enough time to complete the resort casino project and have the opening coincide with the 2025 World Expo, which is expected to draw about 28 million visitors.
But while Osaka is a shoo-in for getting a license, MGM can’t be too cocky. They have stiff competition from several other international casino operators, including Galaxy Entertainment, Genting, Melco International, and LVS. It is worth noting that MGM has entered into an equal partnership with ORIX, which means it will not be a controlling partner. Other casino operators may not be as keen to enter a project where they do not have full control. The world will soon find out whether giving up control in favor of domestic ties was a good strategy for MGM.