MGM Resorts, Las Vegas Sands Apply for Osaka Casino
MGM Resorts and Las Vegas Sands each filed applications for an Osaka casino license. Osaka began the request-for-concept application recently and the two Las Vegas casino companies were the first to file applications.
The winner of the Osaka license process will build a casino on the artificial Yumeshima Island in Osaka Bay. Any developer will build an integrated casino resort expected to cost between $5 billion and $8 billion.
MGM Resorts chief executive Jim Murren recently stated his company would invest as much as $8 billion in an Osaka resort. Murren left the door open for a bigger investment of the company’s “considerable resources”.
No doubt, MGM Resorts does have considerable resources. It added to the package when it signed a partnership deal with Orix, a Tokyo-based real estate development firm. But no casino company boasts more resources than Las Vegas Sands, the biggest operator in the world.
Las Vegas Sands: The Favorite in Osaka?
Sheldon Adelson of Las Vegas Sands Corp once said he would spend $10 billion on a Japanese casino. Adelson made the remarks before the full details of the Japanese Integrated Resort Implementation Bill were published.
Since then, Adelson implied he might not spend as much on an Osaka casino, but the amount still would be significant. Two years ago, the LVS founder pledged $8 billion for a Brazilian casino, so he certainly would spend $8 billion in Japan.
Melco Resorts Osaka Casino Plans
Analysts expect at least two other major competitors to enter the Osaka casino license sweepstakes. Lawrence Ho’s Melco Entertainment and Resorts plans to submit a license for an Osaka casino.
Ho once said he would spend “whatever it takes” to secure a Japanese casino license. Osaka is the biggest and most prestigious of the city’s involved in the first phase of the licensing process, so Osaka clearly is Ho’s target.
Melco’s chief executive took other extraordinary steps to secure a license. He developed the MelGuard facial recognition software to enhance Japan’s own considerable anti-problem gambling system. Ho also claimed he would move Melco headquarters from Macau to Japan, if he received a license.
Wynn Resorts: Osaka Casino License?
Wynn Resorts’ intentions are a bit more nebulous. The Las Vegas casino company is in an expansion phase, but it also faces public relations concerns. Last year, the company’s founder and CEO stepped down amidst sexual misconduct and harassment claims.
Steve Wynn’s departure did not end the complaints. New CEO Matt Maddox added four new members of the board of directors, while ushering out directors considered to be Steve Wynn cronies. Still, the Massachusetts Gaming Commission launched a probe into the boards’ alleged coverup of wrongdoing.
Regulators in Macau and Nevada did the same. Eventually, the Nevada Gaming Commission fined Wynn Resorts $20 million for its role in the Steve Wynn case. The Massachusetts Gaming Commission followed that up with a $35 million fine recently. Macau has not ruled on the case yet.
Will Wynn’s Scandal Hurt Japanese Chances?
Wynn Resorts also recently sought to buy out Crown Resorts, Australia’s largest casino operator. Wynn called off the $7.1 billion proposed deal when Crown insiders leaked the buyout offer to the Aussie press. The US company felt Crown was playing games, trying to increase competition for a buyout (and thus the sell price).
If Wynn Resorts has the money to acquire Crown Resorts, then it could pledge that money to an Osaka casino. The problem is: will the Japanese government deduct points for a company with a recent history of scandal.Especially in a market with strong applicants like Las Vegas Sands, Melco, and MGM Resorts, Japanese leaders might find better options.