Pole position for MGM Resorts International in Osaka casino license race
American gambling giant MGM Resorts International is said to look its best in the race to select the integrated casino resort planned for the huge Japanese city of Osaka.
According to a report by GGRAsia, this is the opinion of global credit rating company Fitch Ratings Incorporated, after rival casino operators Las Vegas Sands Corporation and Melco Resorts and Entertainment Limited recently decided to abandon their plans for Osaka in favor of rival programs for Yokohama and Tokyo are proposed.
Headquartered in Las Vegas, MGM Resorts International was one of seven foreign companies that announced their participation in the initial RFQ phase of the Osaka casino licensing process in June. The list of interested parties allegedly contains only three names, and Genting Malaysia Berhad and Galaxy Entertainment Group Limited are also expected to participate in the forthcoming and more formal Application Form (RFP) of the City of Kansai.
Under the federal law ratified in July 2018, Japan will soon grant three licenses granting three different municipalities the right to build and operate the country’s first integrated Las Vegas-style casino resorts. In order to be selected as host to one of these institutions, the candidate cities must join private sector operators before submitting their final joint proposals to Tokyo.
Osaka is currently one of the leading runners in the process and is reportedly planning to use a 121-acre property on Yumeshima Island as the location for its planned integrated casino resort. The city of 2.6 million is said to have hoped to name its preferred private business partner by the beginning of April, to improve its chances of outperforming Yokohama, Sasebo and Chiba.
MGM, for its part, has reportedly formed a consortium with local financial services company Orix Corporation in March, and this vehicle has already committed to spend more than $ 10 billion on a publicly traded real estate investment fund (REIT) to gain the right to an integrated casino resort to bring to Osaka. Fitch’s Alex Bumazhny told GGRAsia that this venture was “already a strong competitor,” but that his chances have been further improved after the recent moves by Melco Resorts and Entertainment Limited and Las Vegas Sands Corporation.
According to reports Bumazhny GGRAsia …
“We assume that everything that will be built in the end is world class and represents the maximum investment that the successful operator can make before it jeopardizes the profitability thresholds. None of the major public operators still in the running is well-known for under-investing their recent portfolios and has solid financial profiles, development and operating experience. “