MGM Resorts International has solidified its dedication to Japan by removing a clause that could have allowed the Las Vegas-based gaming operator to abandon its multibillion-dollar project in Osaka.
MGM’s involvement in Osaka traces back to September 2021 when the Osaka Prefecture selected the company as its casino resort development partner. After extensive planning and obtaining the necessary approvals, MGM and its local consortium were awarded Japan’s first casino license in April 2023. Alongside the Japanese financial services conglomerate Orix Corporation, MGM holds a 42.5% stake in the MGM Osaka project. The remaining 15% equity is shared among Japanese firms such as Panasonic, Kansai Electric, and West Japan Railway.
Initially, the development agreement between MGM Resorts and the Osaka prefecture and city governments included a clause permitting MGM to withdraw from the project under certain conditions. These conditions encompassed the failure of tourism to recover to pre-COVID-19 levels, unfavorable financing terms, or unforeseen issues with the construction site on Yumeshima Island. However, Japanese media outlet Nikkei reports that MGM has amended the partnership agreement to eliminate this exit clause, reinforcing its commitment to the over $8 billion investment. This move has alleviated concerns from construction companies about the project’s stability.
With MGM committed, construction is expected to accelerate. The project, which commenced in December 2023, is estimated to cost JPY1.27 trillion (US$8.9 billion) and will take approximately six years to complete. The planned integrated resort will feature 2,500 hotel rooms across three distinct brands, 730,000 square feet of convention and meeting space, numerous restaurants and bars, a theatre, and a shopping mall. Although MGM has not detailed the casino’s size, Japanese gaming law limits the gaming floor to 3% of the property’s total indoor floor space.
Currently, workers are focusing on fortifying the site by drilling holes to place steel beams 230 feet into the bedrock. Yumeshima Island, historically a landfill turned land reclamation project, is pivotal for Osaka’s 2025 World Expo hosting plans. Although MGM intended to have the Osaka resort operational by Expo 2025, they now aim for a mid-2030 opening. The Expo, themed “Designing Future Society for Our Lives,” is expected to act as a showcase for future societal advancements.
Yumeshima Island is envisioned to become a “smart resort city” and a global tourism hub, contributing significantly to the long-term development plans which also include zones for business, tourism, logistics, and green space. MGM’s unwavering commitment to its Osaka casino resort underscores a nearly decade-long investment in Japan’s burgeoning integrated resort sector.
