Currently, casino gambling is illegal in Japan. However, legislators seem to be inching closer to passing a widely debated bill that would lay the basis for a multi-stage process for the establishment of two hotel and casino resorts in the East Asian country.
Las Vegas-based casino operator MGM Resorts International could invest up to $10 billion in a luxury integrated casino resort in Japan, CEO James Murren told Reuters on Monday. An MGM-led casino project could be completed by 2022-23, Mr. Murren added.
The Promotional Integrated Resorts Bill, as it is formally referred to as, was first introduced to the Japanese Diet years ago and has been submitted for consideration several times but without much success. More pressing legislative issues and vigorous opposition from the Komeito Party, a long-time coalition partner of the leading Liberal Democratic Party, have prevented the proposal that would legalize casinos in the country from moving forward.
Casino proponents have seen certain key legislative appointments and the increased influence of Japan’s governing party as light at the end of what has turned out to be a very long tunnel. With legislators likely to review the bill this fall, it is believed that it now has excellent chances to be finally passed into law.
Mr. Murren added that they could invest between JPY100 billion and JPY300 billion in a complex in certain regional areas like Hokkaido but metro areas were of greater interest to them.
MGM Resorts’ Chief Executive told Reuters that his company plans to plow between JPY500 billion and JPY1 trillion (or up to $10 billion) onto a multi-purpose resort with gambling, accommodation, retail, food and beverage, and multiple other options, as well as convention facilities. The gambling operator will be targeting some of the country’s largest metropolitan areas like Tokyo, Osaka, and Yokohama.
The gambling operator had formerly announced that it would be monitoring the opportunity to expand its Asian presence by managing a resort in Japan when and if the country opens its market. However, it has not disclosed more details about its plans up until now.
Mr. Murren said today that if they receive a license in Japan, they will probably create a REIT that will see a MGM-controlled operating unit be charged with investment and expenses and with paying rent to a real estate firm. The latter will be owned by private investments as well as by international and local companies.
According to the executive, many respected and reputable companies will be interested in obtaining an equity stake in the project as a public listing of such a large-scale development usually proves to be quite appealing.
MGM Resorts has not been the only major gambling operator to be eying a casino license in Japan. Las Vegas Sands has previously revealed that it, too, would be bidding for the opportunity to build an integrated resort in the country. The company would invest up to $10 billion in a potential Japanese business endeavor. Both MGM Resorts and Las Vegas Sands operate casino resorts in Macau.
Such a high-profile interest in Japan as a potential casino destination does not come as a big surprise. According to Asian brokerage firm CLSA, the country’s future casino market may be worth $40 billion, which would turn it into one of the world’s largest gambling hubs.