MGM is sure it wants a bite out of the Japanese integrated resort pie, but it’s not sure it wants to nibble at anything stale. That is why MGM Osaka will have an “escape clause” should things go pear-shaped, Inside Asia Gaming, a leading local publication for the region writes.
MGM Osaka Project Has Contingencies to Never Happen
MGM is venturing into Osaka as part of a consortium with ORIX Corp, as is the original application prerequisite whereby overseas companies must form an investment entity with a local partner. The clause would only apply if the government certified the Osaka bid later this year for an integrated resort.
MGM has outlined three specific conditions that must be met by the government so that the clause may remain inactive. They want to see reasonable reassurances that tourism will pick up once again in the wake of a devastating COVID-19 pandemic.
There will be demands for additional research to ensure that the future framework that is set by the Japan Casino Regulatory Commission would guarantee international competitiveness for the project and that potential soil contamination of the site of Yumeshima Island can be properly addressed.
Assessing the Situation Before Committing
To this end, MGM and ORIX Corp will work independently to try to assess whether an integrated resort is feasible and whether all their conditions for participation have been met. However, any decision the consortium makes should be communicated to Osaka officials within 60 days of certification.
At this point, the consortium will forward JPY 650 million ($5.6 million) fee. The estimated cost of building an integrated resort will be anything between $10 billion and $12 billion experts have estimated. According to Inside Asia Gaming, though, the fact that MGM Osaka is asking for its own way already doesn’t bode well for the feasibility of the IR ambition outlined by former Japanese Prime Minister Shinzo Abe.
A total of three licenses will be issued to integrated resorts operators, but the initial timeline for 2024-2025 no longer seems possible. If MGM Osaka ever goes ahead it would feature 2,500 hotel rooms, 730,000 square feet of meetings and leisurely spaces, and more.