Business

Casino resort frontrunner MGM says winning and building Osaka facility by 2025 is tough but doable

by Eric Johnston

Staff Writer

Over the next few months, the government is expected to debate the structure of a new regulatory committee that will oversee so-called integrated resort complexes containing casinos and draft a basic policy specifying the selection criteria for such facilities.

For Osaka, considered the frontrunner of the three locations that will be allowed to host the resorts, the hope is that once the Diet formally approves all necessary policies, the bureaucratic process for granting interested localities IR licenses, and subsequent construction, will go smoothly and quickly. By March 2025, just a couple of months before the Osaka World Expo opens, the city wants a casino resort to be up and running.

It’s an ambitious goal that MGM Resorts International Chairman and CEO Jim Murren, in a recent interview with The Japan Times, said was hard but still possible. MGM is considered locally to be one of the favorites for winning the rights to build an integrated resort on Osaka’s Yumeshima island, where the Expo will also be held, and has over the past few years been working with Japanese firms, including bid partner Orix, to make that happen.

“I don’t have doubts about the abilities of the architects we have on board, or those of the civil planners and general contractors,” Murren said. “The challenge to meeting the March 2025 opening will be getting through the permit process.”

Although it’s not yet clear how the national government’s process on choosing a winner will work, if all goes well and if a license is granted, a decision would be made by Osaka officials around August or September next year as to who the operator will be. While local media polls in the Osaka area on the issue have revealed different levels of public enthusiasm for an IR complex, political support in the city assembly and business community has always been strong, with Osaka Mayor Ichiro Matsui having long advocated the need for such a facility.

“There is clarity, passion and support for an IR project of a kind I see in Osaka, but not currently in other parts of Japan,” Murren said.

Key to the success of an Osaka resort will be its ability to draw a variety of customers from all economic backgrounds, such as high-end customers, who will spend small fortunes at not only the casino but also adjacent hotels, restaurants and shops, and those who are more budget-conscious.

In addition, Murren said his company was working with local firms to create an Osaka IR that is strongly connected to the Kansai region. That will include a travel promotion center that will emphasize the Kansai region, including the Kyoto, Nara, Kobe and Wakayama areas.

Hiring locally is also a top concern for Osaka’s leaders, and Murren said that despite the current labor crunch MGM wants to hire as many local workers as possible. Having properly trained dealers and staff who can speak to foreign customers in their own language will be important, Murren said. MGM will work with the local community to provide educational opportunities for employees, including language classes, he added.

To reach Yumeshima by train, however, a new tunnel and railway station have to be built. Last year, Osaka indicated it wanted the company that wins the rights to an Osaka casino to provide ¥20 billion to help offset construction costs. While there are questions over whether local officials might ask for more if there are cost overruns, and what that could mean for the relationship between Osaka and whoever is selected to operate an IR, Murren says MGM’s position has always been that it has an open mind toward any infrastructure involvement.

Even though there has been a positive political reception in Osaka for a casino resort complex and MGM has put in the advance preparation work to improve its chances of winning the rights to open a facility, it is still the central government that has the final word on the conditions on which a license will be granted. Murren is aware that other localities that are also exploring the idea of such resorts, including Tokyo, are watching Osaka’s efforts closely.

“Osaka will likely be the site of Japan’s first IR. So there can be no mistakes. It has to be flawlessly executed and operated,” he said.