It was once a three-horse race to build an integrated resort in Osaka. But now, MGM Resorts International and local partner Orix are the last competitors standing.
Last week, reports circulated confirming what many already knew – that MGM was viewed as the leader in a group also consisting of Galaxy Entertainment and Genting Singapore. Soon thereafter, it was revealed that the Las Vegas-based operator and Orix were the only party to submit a bid in Osaka’s request for proposal (RFP) round.
Officials from Japan’s third-largest city confirmed the MGM/Orix group was the only one to participate in the RFP process. Last Friday evening, Genting Singapore confirmed its withdrawal from the Osaka race.
After careful consideration of the opinions of many shareholders, we regret that we will not continue our participation in the Osaka IR Project going forward,” said the Singapore-based company in a statement.
That announcement came just weeks after the company sought and gained approval from investors to spend up to $10 billion on an integrated resort in the Japanese metropolitan area.
Galaxy confirmed today it’s out of the Osaka race, too, with an executive saying, “We decided at this time that our focus should be on other potential locations in Japan, including, among others, Yokohama.”
Playing With The Big Dogs
Although it didn’t specify a reason for its departure from Osaka, Genting Singapore said it’s not abandoning Japan aspirations altogether. Rather, the operator is turning its attention to Yokohama.
While MGM’s long-running front-runner status in Osaka may have turned off competitors, the situation in Japan’s second-largest city won’t be any easier. There, Genting will butt heads with the likes of Las Vegas Sands (LVS), Melco Resorts & Entertainment, and Wynn Resorts, among others.
The Yokohama competition may prove to be even tougher than Osaka’s for at least two reasons. First, along with MGM, LVS is widely viewed as one of the operators most likely to procure one of Japan’s initial three gaming licenses. Second, Yokohama locals mostly oppose the idea of a casino-resort, a concept that enjoys support in Osaka.
“In the future, Genting Singapore will focus on participating in the Yokohama IR request for concept (RFC), which is currently underway,” said Genting.
It is expected that Japanese policymakers will make decisions on which cities will become hosts to gaming destinations sometime next year. From there, those locations will choose an operator partner and submit proposals to the federal government.
MGM has obviously cleared one hurdle with its “one and only” status in Osaka. The company’s Japan efforts are led by former Nevada Gov. Brian Sandoval (R-NV), but reinforcements could be on the way.
Last week, Jim Murren surprisingly announced that he’s stepping down as chairman and chief executive officer of the gaming company. But a new filing with the Securities and Exchange Commission (SEC) indicates he will be receiving some consulting compensation and Murren himself has said that he’s going to be more involved with MGM’s Japan plans as times goes on.