MGM Resorts International To Open Ground In Osaka By 2021
MGM Resorts International has set a 2021 target as its proposed date to start construction on an Integrated resort in Osaka. The company hopes that by 2025, the project would be complete should it acquire one of Japan’s three licenses.
MGM CFO Corey Sanders along with MGM’s president Brian Sandoval has been working closely to ensure the company secures a Japanese gaming permit.
MGM Grand Operator is closely working with Orix, a Japanese firm, to gain entrance into the Japanese market and build an integrated resort in Osaka, speaking about the recent development. Several analysts believe the move will be highly beneficial.
“Currently, there are only three companies that are in the running for Osaka: MGM [Resorts], Genting Singapore [Ltd] and Galaxy [Entertainment Group Ltd],” said the Bernstein analysts. “MGM believes its strong local partnership with Orix Corp will give… an edge over… competitors.”
It is no news that there is three gaming license in Japan. Along with MGM, several other top establishments are interested in gaining those licenses. However, MGM’s ability to convince Japanese policymakers that it can have its resort fully operational by 2025 will play a key role in helping the company secure entry.
Costs and Comparison
Analysts say MGM would end up spending close to $10 billion to build a fully integrated resort in Osaka.
“The Japan market should be structurally similar to Singapore and MGM is expecting a return on investment of up to 20 percent,” said the analysts.
The $10 billion cost estimate jibes somewhat with other analyst projections. Recently, a team of Fitch Ratings analysts that visited the Land of Rising Sun came away saying they believed operators would need to spend $10 billion to $15 billion to build gaming properties there, up from a prior estimate of $10 billion at the high end.
The good news for MGM is that some of its tough competitions like Melco Resorts, and Las Vegas Sands are shifting focus from Osaka to Yokohama.