Operator News
Japan – LeoVegas creates headache for MGM in Osaka
By Lewis - 17 July 2023
Polls in Japan show local public support gaining momentum behind MGM’s Osaka Integrated Resort (according to a poll targeted at 6,190 locals in April, 53 per cent stating that they supported an IR with 45 per cent opposing it), though external opposition to the development continues to make headlines.
Most recently, the Association for Considering Gambling Addiction Problems petitioned the Japan Tourism Agency to revoke permission for MGM to build the Osaka IR, citing its involvement in illegal online gambling in Japan. The Group claims that Leo Vegas unlawfully provided online gaming operations, including an online casino, targeting Japanese citizens and that MGM, through its acquisition of LeoVegas, has profited as a result from such illegal action.
Neither side disputes the main facts, just the timeline and the implications for the licence-holder. MGM released the following statement: “Before completing its acquisition of LeoVegas, MGM asked LeoVegas to block access to its site from within Japan. Therefore, MGM evaluated the acquisition of LeoVegas based on the company’s business and operating conditions, excluding the Japanese market.” MGM argues that the potential conflict was resolved before it started, while the citizens group contends that MGM should be held responsible for clarifying what happened to the revenues illegally gathered from Japan before it took over the company.
MGM Resorts completed its acquisition of LeoVegas in September 2022, the same month the company was selected as Osaka’s preferred partner to develop an IR on Yumeshima. In April 2023, the central government officially approving Osaka’s IR development plan. MGM Resorts, the Orix Corporation and additional partners are finalising plans for the Osaka casino resort, expected to cost US$10bn to construct. The estimated opening date has been extended to the first half of 2030, with the land lease agreement to be finalised in the very near future. Ground breaking is expected before the end of this year.
MGM estimates that its Osaka IR will generate ¥420bn (US$3bn) in annual casino-related revenues and ¥100bn (US$720m) in annual revenues from non-gambling activity.
