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Japan – MGM pledges $10bn investment on Japanese casino
By Phil - 31 October 2016
With the stalled casino process now seemingly back on track in Japan, MGM Resorts has said this week that it would be willing to invest US$10bn on a large-scale casino resort in Japan if gambling is legalised.
A parliamentary committee meeting held in Tokyo last month has helped propel the optimism that legislation could be in place by the end of the year. At a meeting this week, MGM CEO James Murren highlighted Tokyo, Yokohama or Osaka as potential sites for casino development.
“We think there would be a tremendous amount of demand, and ultimately a public listing of these types of Japanese resorts would be very appealing,” Mr. Murren said in an interview with Reuters.
He added that a REIT could be the best way forward with an MGM-controlled operating company responsible for expenses and investment paying rent to a property company owned by private investors and domestic and foreign companies.
“That could be an interesting way to expand the level of involvement, as there are many investors who are risk averse and looking for yield and others who are more risk tolerant,” Mr Murren said.
He believed that a resort in Tokyo, Osaka or Yokohama could be built by 2022 to 23.
The renewed optimism has been sparked by Japan’s Prime Minister Shinzo Abe move to appoint three officials who are proponents of the casino bill to top level positions within the ruling Liberal Democratic Party. Toshino Nikai, secretary-general; Hiroyuki Hosoda, General Council chairman; and Toshimitsu Motegi, policy chief, have now confirmed their intention to try and pass the bill during this current parliamentary session, which ends on November 30. With the LDP now claiming an overall majority in upper and lower houses of parliament, there is growing optimism that the bill could be passed if it comes to a vote.
Over 20 localities in Japan showed interest in hosting casino resorts, which would also include hotels, convention facilities, retail, theme parks and entertainment facilities with support particularly strong in Osaka and Yokohama. With time running out for casinos to be put in place in time for the 2020 Olympic Games, and despite predictions they could generate $40bn a year, they could now be sidestepped altogether.
MGM Resorts rival operators Las Vegas Sands Corp, Wynn Resorts and Caesars Entertainment had all been optimistic that the Prime Minister Abe would be able to pave the way to integrated resorts in 2014 and 2015 but discussions failed to make the parliamentary sessions.
Kotaro Tamura, a Milken Institute fellow, went as far as to say: “This time, it’s 100 per cent happening.”
