Inside Asian Gaming

IAG JAPAN JAN 2022 30 An artist’s impression of MGM Resorts’ Osaka IR. MGMリゾーツの大阪IR完成 予想図。 think it’s going to pay the kind of returns that we need to meet our expectations. There is a long way to go.” In January 2021 analysts at brokerage Sanford C Bernstein speculated that potential acquisitions by MGM Resorts in the iGaming space could result in the company either reducing its stake in a Japanese integrated resort or exiting Japan entirely. Even if Hornbuckle has since reaffirmed MGM’s commitment to Osaka, the days of tossing about US dollar investments in the eleven figures are long gone, with MGM now estimating the total cost at JPY 1 trillion (US$9.1 billion). In August 2021, Hornbuckle told investors MGM was prepared for a much more manageable US$2 billion to US$2.5 billion investment split over three years from 2024. That investment is expected to be matched by MGM’s major consortium partner ORIX, with a further US$4.1 billion to US$5.1 billion to be funded predominantly by debt, but also potentially by minor consortium partners contributing up to US$1.8 billion. In March 2021, Japan’s Minister of Land, Infrastructure, Transport and Tourism, Kazuyoshi Akaba, said operators would not submit applications if they did not think IRs would be profitable. Perhaps he wishes he could eat his words because that is precisely what has transpired. So, what happened? Why did most of the world’s major IR companies give up on Japan? There are many answers. Firstly, the Japanese government has not done a good job selling the benefits of IRs to the Japanese people. Unlike COVER STORY