Lawrence Ho and Jim Murren Visit Osaka to Discuss a Casino
Jim Murren of MGM Resorts and Lawrence Ho of Melco Resorts & Entertainment were on-hand for the Summer Sonic Festival (pictured) in Osaka. For the first time ever, Melco Resorts was the sponsor of the event.
Before the grand finale of the festival, Lawrence Ho had met with Osaka’s governor to make a donation to the region’s natural disaster preparation. Everything was done to show the Macau casino company’s seriousness about securing an Osaka casino license.
Jim Murren and his team from MGM Resorts was not quite as solemn. Murren brought the Blue Man Group to entertain 100 local guests on a chartered boat in Osaka Bay.
Both men were in Osaka for a reason, though. Last month, the Japanese Diet approved 3 casino licenses. The consensus opinion suggests Osaka will receive the first of the three casinos. Murren and Ho want to be the one to secure the license for the city of 2.7 millon.
“Osaka Has Raised Its Hand”
Unlike rival cities, Osaka has made clear it wants a license and is ready to do business. As Ed Bowers, MGM’s EVP of Global Development, put it, “Tokyo has not raised its hand, Yokohama has not raised its hand – Osaka has raised its hand.”
It is characteristic of Osaka’s can-do attitude. In 2104, Neil Bluhm of Rush Street Gaming said he could have a casino built in Osaka before the 2020 Tokyo Summer Olympics, because of the city leaders’ pro-business stance. Bluhm said work on a Tokyo casino would take years longer – and not just because of all the construction for the 2020 Olympics.
Other casino operators have been less specific in their choice of cities. Sheldon Adelson has said he would invest $10 billion in the Japanese casino industry, if he received a casino license for Tokyo, Yokohama, or Osaka. Mark Frissora of Caesars Entertainment has not voiced his preferences in terms of city, but has visited with Japanese city officials, regulators, and politicians to discuss a Japanese casino.
Matsui: “Properly Nuture the Tourism Industry”
In a way, Osaka needs Japan’s first brick-and-mortar casino more than Tokyo does. Over the past generation, during Japan’s relative economic stagnation, Osaka has fallen far behind Tokyo in wealth and power. Once the world’s largest seaport, Osaka relies more on tourism than ever. A casino would be a boon to the tourism industry.
Osaka Governor Ichiro Matsui said of the prospect of building a casino in the area, “I want to properly nurture the tourism industry in Osaka as one of its pillars.”
Osaka Casino Expected by 2024
Matsui believes his city can have a casino built by 2024, if it receives the first casino license. First, the city’s leaders must choose which developer will be its partner. Melco Resorts and MGM Resorts are two main competitors, but Caesars Entertainment and Las Vegas Sands Corp. of the US, as well as Galaxy Entertainment of China, also have massive portfolios and similar interest.
As many as 8 casino companies might bid on the Osaka casino license. MGM Resorts and Las Vegas Sands each suggested they might invest as much as $10 billion in a Japanese casino, while Lawrence Ho said he would pay “whatever it takes”. Ho also said he would move Melco’s headquarters to Japan if he received a license. The reason is simple: an Osaka casino is estimated to be worth $4 billion a year.
Ban on Osaka Contacts with Executives
Once Osaka picks a partner, it will have to convince national officials to approve their casino license. Osaka also has to convince a skeptical public that casino gambling is business like any other. For that reason, Ichiro Matsui and his fellow officials are being cautious. Any hint of corruption might sabotage the entire project.
To assure there is no appearance of impropriety, Osaka officials have been banned from attending casino executives’ parties, having dinner with them, or receiving gifts from them. Licensing begins in the coming months, with a decision on license applications expected sometime in the first half of 2019.