Operator News
Japan – MGM’s consortium for Osaka bid could reach double figures
By Phil - 29 May 2019
The MGM Resorts-led consortium of companies to bid for a casino licence in Osaka could involve 12 companies.
The Las Vegas giant has said its partnership with Japanese financial services group Orix is prepared to invest US$9bn on developing a casino in Osaka with the venture being split equally although MGM confirmed it would look for other local companies to hold minority shares as part of its Osaka First strategy.
Speaking to Nikkei Asian Review, MGM Chairman Jim Murren said: “MGM Resorts is focused on finding the right mix of companies aligned in their vision and culture that we are trying to create. We don’t have an artificial cap for the number of companies inside and outside the consortium to partner with. We want to find the right mix of companies aligned in their vision and culture that we are trying to create.”
Ed Bowers, Chief Executive of MGM Resorts Japan, added: “We will include other Kansai companies in our consortium, say, more than 10 companies. MGM and Orix will each hold significant equity and other companies will have smaller equity stakes.”
The final cost of the development could rise to Y1tn, with the consortium seeking to fund the rest with loans, accounting for 50 to 60 per cent of the total investment.
Some analysts believe the all-in approach from MGM represents a big gamble on just one of the licences.
Brendan Bussmann, partner and director of government Affairs at Global Market Advisors, said: “MGM’s exclusive focus towards Osaka is a big bet. It is too early for operators to be making potentially impactful decisions on their projects before the central government displays their path and process.”
