Today, Japan’s national government officially approved a plan to construct the country’s first integrated casino-resort in the western city of Osaka, allowing the 1.8 trillion yen, which is approximately $13.5 billion, integrated casino-resort to officially open in 2029.
Events leading to official approval:
The national government decided to approve Osaka’s first IR after the pro-casino Japan Innovation Party kept the prefectural governor and city major offices in Osaka on Sunday.
In this regard, ORIX, MGM Resorts International and Osaka’s city and prefecture governments said: “We welcome the approval and will work together to develop the project.”
However, the government’s casino plans have been hindered in the past by the COVID-19 pandemic and a corruption scandal in 2019 during that saw the detention of a lawmaker campaigning for the legalization of casinos. In addition, Caesars Entertainment Corp., Las Vegas Sands Corp. and Wynn Resorts Limited pulled out from the intended projects.
All this left only Osaka and the southwestern prefecture of Nagasaki to officially submit bids by the April 2022 deadline.
However, regarding the Nagasaki bid, the government also said today that it “it would need more time to review the Nagasaki plan, led by Casinos Austria International.”
No reason was given for the decision.
Layout of the proposed IR:
The main goal of building this integrated casino-resort is to lure domestic and global tourists.
Furthermore, this grand casino-resort will be located on Yumeshima, a reclaimed island in Osaka Bay that will host the 2025 World Expo, and will consist of a conference center, hotels, museum, shopping mall and ferry terminal. In addition to that, high-rollers will have entry to an adjacent helicopter pad.
In 2018, an integrated resort law was implemented which ensured that casino games like baccarat or poker were played in officially validated establishments.
This law was seen as part of the government’s attempt to lure tourists in Japan. However, before that law, casinos and other private gambling were illegal in the country.
In this sense, among casino operators, Japan is a valued market, due to its wealthy population of 126 million and proximity to Asia’s rich gamblers. However, opinion pools have showcased that many Japanese residents are concerned about crime and addiction to casinos and gambling.
Ownership of the new project:
When it comes to the owners, the US-based giant MGM Resorts International and the local company ORIX Corp. will be responsible for managing the new IR project, with each of them possessing a 40% stake in the company that was established to operate the complex.
In addition, the remaining 20% will be owned by another 20 companies, according to a local government document, which said: “MUFG Bank and Sumitomo Mitsui Banking Corp would provide 550 billion yen of project financing for the resort.”
A big economic opportunity for Japan:
Looking at profits, the main goal of this IR is 520 billion yen yearly, which will come with a large majority from the gambling business.
It is projected to lure 6 million global tourists and 14 million domestic visitors, according to the project document.
In this regard, Prime Minister Fumio Kishida, said: “The project would contribute to the economic growth of the Kansai area around Osaka and greater Japan after World Expo 2025, as the country aims for a post-pandemic rebound in tourist spending.”
As for public reaction to the new integrated casino-resort, a Mainichi newspaper survey of Osaka residents conducted this month said: “45% of respondents are in favor of the casino, 38% against and 17% undecided, although women and the elderly were more likely to be opposed.”