Posted on: September 9, 2024, 09:54h.
Last updated on: September 9, 2024, 10:02h.
MGM Resorts International has reaffirmed its commitment to Japan by striking a clause that would have allowed the Las Vegas-based gaming operator to jump ship on its multibillion-dollar undertaking in Osaka.
In September 2021, the Osaka Prefecture selected MGM as its casino resort development partner. After years of planning and the obtaining of necessary approvals, MGM and its local consortium were issued Japan’s first casino license in April 2023.
MGM and Japanese financial services conglomerate Orix Corporation are equal 42.5% partners in MGM Osaka, a sprawling integrated resort complex on the artificial man-made island of Yumeshima. The remaining 15% equity stake is comprised of several Japanese companies, including Panasonic, Kansai Electric, and West Japan Railway.
When MGM Resorts signed its development agreement with the Osaka prefecture and city governments, a condition was included to allow the company to back out of the deal under certain terms. MGM has reportedly canned the clause to signal its ongoing commitment to completing the more than $8 billion project.
Exit Terms
The Osaka casino development agreement with MGM Resorts allowed the Bellagio operator to withdraw from the project if tourism failed to recover to pre-COVID-19 levels, if financing was unable to be secured at fair terms, or if unexpected issues with the construction site on Yumeshima Island arose.
Japanese media outlet Nikkei reports that MGM recently amended the partnership to remove the exit clause. Construction companies reportedly expressed concerns about signing contracts amid the possibility that MGM could depart the venture.
With MGM fully on board, construction is expected to be expedited. Work began on the JPY1.27 trillion (US$8.9 billion) scheme in December 2023.
MGM Osaka is slated to be a six-year construction endeavor. The integrated resort blueprint includes 2,500 hotel rooms across three distinct brands, 730K square feet of convention and meeting space, dozens of restaurants and bars, a theatre, and a shopping mall.
MGM hasn’t specified the scope of the casino, but the gaming floor is limited to 3% of the property’s overall indoor floor space under Japan’s 2018 gaming law.
Solid Foundation
With MGM Resorts securing its Osaka plan, an unwavering pledge that originated nearly a decade ago, laborers are focused on strengthening the island worksite. Since December, workers have been drilling holes where steel beams will extend some 230 feet deep to reach bedrock.
Yumeshima Island was a former landfill that became a land reclamation project in the early 1990s. Yumeshima is to play an integral role in Osaka’s hosting of the 2025 World Expo.
MGM had hoped to have its Osaka casino resort up and running in time for Expo 2025, which begins next April and runs through mid-October. The theme, Designing Future Society for Our Lives, is billed as a showcase laboratory for a future society.
Yumeshima is targeted to become a “smart resort city” by the city government that serves Osaka as a “global tourism hub.” The long-term development plan includes zones for business, tourism, and logistics, plus green space.
MGM told Asian gaming media outlet GGRAsia over the weekend that it continues to target a mid-2030 opening for MGM Osaka.