MGM Resorts International has received official certification for its
Area Development Plan from Japan's Ministry of Land, Infrastructure,
Transport and Tourism, moving the company one step closer to building a
US$10 billion integrated resort in Osaka.
The Area Development Plan was submitted last year by Osaka
Prefecture/City and MGM's joint venture partner ORIX. The resort aims to
transform the region into a top entertainment and hospitality
destination, generating 520 billion yen (US$3.8 billion) annually and
creating 93,000 jobs. The project will also serve as a hub for tourism
across Japan, with the doors expected to open in the latter half of
The development will include entertainment complexes such as a
theatre, casino, convention centre, and hotels, making it an integrated
resort. The facility will be located on Yumeshima, an artificial island.
Osaka IR, a joint venture managed by Osaka Prefecture/City and a
consortium of 20 investors including MGM Resort International, Orix,
Panasonic Holdings, and Daikin Industries, will manage the resort.
Osaka aims to emulate the triumph of integrated resorts in Singapore,
which established itself as a global tourist destination after the
launch of Marina Bay Sands and Resorts World Sentosa. To accomplish
this, the Osaka resort will feature Japanese eateries, shops selling
conventional handicrafts, and places where visitors can engage in tea
ceremony and flower arrangement. The resort will also house a tourism
center, guiding tourists to sightseeing spots in the Kansai area.
One hurdle is to create a feasible revenue model as the government
enforces a 3% cap on the integrated resort's gambling floor space, with a
maximum capacity of 11,500 individuals. The casino's objective is to
draw in over 16 million visitors yearly, necessitating the casino to be
filled with new guests four times a day. This scenario poses a challenge
to the integrated resort's sustainable growth since the business mainly
depends on the casino.
An additional obstacle is the need to prevent gambling addiction,
which is why Japanese residents will only be allowed to visit the casino
three times per week, ten times within a 28-day period, with a 6,000
yen ($44) admission fee. In contrast, foreign visitors can enter for
free. To prevent gambling addiction, Singapore charges its citizens a
daily entry fee of S$150 ($112) to visit the casino, which has been
effective in curbing the problem.
The creation of an integrated resort in Osaka is a notable stride
towards Japan's goal of being a "tourism powerhouse," despite the
obstacles, as per Prime Minister Fumio Kishida. If successful, the
integrated resort is predicted to yield considerable economic gains for
the Kansai region, encompassing annual taxes and other receipts from
businesses amounting to 106 billion yen.