MGM denies allegations of profiting from LeoVegas’ alleged illegal gambling operations in Japan.

Posted on: July 17, 2023, 07:01h. 

Last updated on: July 17, 2023, 07:01h.

MGM Resorts has responded to an accusation that it may have illegally profited from online gambling in Japan through its acquisition of LeoVegas.

MGM Resorts, Osaka, LeoVegas
A computer rendering of MGM Resorts’ planned $8.1 billion integrated resort in Osaka Bay, which a local anti-gambling group says should be halted. (Image: MGM Resorts Japan)

In April, MGM won the first Japanese casino license, in partnership with the city of Osaka, and will build an $8.1 billion integrated resort in Yumeshima, an artificial island in Osaka Bay.

However, a local group called the “Society for Considering Gambling Addiction Problems” (SCGA) is demanding that MGM’s license be revoked and the development project be suspended.

SCGA alleges that MGM has benefited from the illegal proceeds obtained by LeoVegas in Japan. According to the group, LeoVegas used to operate as an illegal online casino targeting Japanese players.

According to SCGA, if this is true, MGM would be in violation of Japan’s Act on Punishment of Organized Crime, specifically articles 11 and 18. This would make MGM ineligible to be approved as a major shareholder in a Japanese integrated resort, according to the country’s casino regulations.

‘Completely Unacceptable’

MGM Resorts Japan has issued a statement on its website denying the group’s allegations, stating that they are “baseless and may lead to misunderstandings.” MGM finds the allegations “completely unacceptable.”

MGM acquired LeoVegas, a publicly traded Swedish company, in the fall of 2022 for $600 million.

It is true that LeoVegas targeted the Japanese market with a website in Japanese, offering bonuses in Japanese yen. Its sister brand Royal Panda was also tailored to the Japanese market.

However, both LeoVegas and Royal Panda announced in late August 2022 that they would no longer operate in Japan. A spokesperson for LeoVegas claimed that the decision was unrelated to the MGM acquisition, despite the fact that the deal had already cleared all regulatory hurdles. The spokesperson stated that LeoVegas had been focusing on regulated markets before the acquisition.

According to MGM Resorts Japan’s statement, MGM evaluated the acquisition of LeoVegas while excluding the Japanese market.

Always Controversial

The establishment of casinos in Japan remains controversial. The Integrated Resorts Implementation Act (IRIA) was passed in 2018 to officially legalize casino gaming, but there is still skepticism among the Japanese population. Polls consistently show that the public is opposed to the establishment of integrated resorts by a 2 to 1 margin, with concerns about increased problem gambling being a common reason for opposition.

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