MGM Resorts’ Plan To Develop Osaka Resort Faces Delays
MGM Resorts International’s longstanding plan to develop a multi-billion dollar integrated resort in Osaka, Japan has been delayed as a result of the global outbreak of the COVID-19 coronavirus.
Officials from Osaka released a statement that affirmed the city will be giving up on their plans to launch the MGM Osaka integrated resort before the 2025 World Expo which was is scheduled to take place from April to October, due to the widespread travel restrictions enforced to quell the spread of the pandemic.
Gaming industry experts remain positive on the prospects of integrated resorts in Osaka and other Japanese regions. According to Brendan Bussmann, a Global Market Advisors partner, while integrated resorts face a number of scheduling hurdles, most investors remain confident that Japan will be a key market for integrated resorts.
The CEO of MGM Resorts Japan LLC, Ed Bowers, acknowledged that their timeline will have to shift due to the COVID-19 pandemic, but maintained that they are committed to their plans to build in Japan.
MGM is the only casino company in the running to build an integrated resort in Osaka, but its plans have not yet been approved by the necessary officials in Japan.
Japan will be handing out three gaming licenses this year, but the government has kept silent on the specific cities where the resorts will be constructed. According to industry analysts, Osaka is likely to be one such site, with a host of other cities vying for the remaining two spots: Nagasaki, Tokyo and Yokohama.
MGM’s Japanese partner for their bid is the financial services company Orix. Two other Las Vegas-based casino firms—Las Vegas Sands Corp. and Wynn Resorts Ltd. also have their eyes on the nascent integrated resort market in Japan.
Las Vegas Sands expressed their continued interest in Japan, although it denied any interest in Osaka. Instead, they are looking at Tokyo or Yokohama for their own integrated resort. Wynn Resorts has not made their plans public as of this writing.
Delays Could Benefit MGM
According to Bussman, Osaka is the first region to delay their timeline, although he stated that the original plan of completing the resort before the World Expo started was always a difficult proposition. However, Bussman is confident that the resort will be completed by 2026.
Some believe that the enforced delays of the ongoing pandemic could benefit MGM. Financial analysts believe that delays could help give MGM a breather to ensure that their finances will be able to withstand the massive investment necessary for the Osaka project.