MGM Resorts International (NYSE: MGM) may face unexpected setbacks in Osaka: a delayed opening date and higher construction costs for its planned casino hotel in Japan’s third-largest city. This potential delay comes as MGM pursues its long-anticipated Japan gaming license with a concentration on Osaka, which is scheduled to host the World Fair, also known as Expo 2025.
Recent Japanese media reports indicate that the Bureau International des Expositions (BIE), the overseer of Expo 2025, has requested a six-month halt in construction on the gaming venue. If the corporate entity developing the integrated resort, Osaka IR KK, complies, this pause would almost certainly delay the venue’s opening and increase costs for a project already estimated at $9.1 billion.
Expo 2025 is set to run from April through October on Yumeshima Island in Osaka Bay, the same location where MGM’s property, Japan’s first regulated casino hotel, is being built. When MGM initially embarked on securing its Japan license, there was hope the Osaka venue could be completed before Expo 2025, allowing MGM to capitalize on the event. However, a series of bureaucratic delays in Japan’s gaming regulatory process squashed that dream.
Now, BIE’s request to halt construction is based on concerns that the ongoing development could harm the aesthetics of Expo 2025. This request arrives at a time when there are signs of progress on the integrated resort, as highlighted by MGM CEO Bill Hornbuckle during the company’s second-quarter earnings conference call last week. “I just recently returned from Japan and that it’s moving along nicely,” Hornbuckle told analysts. “We are in the ground as we speak and we hope to start pylons by May or June of next year with a target date still of middle of 2030 for opening.”
This call occurred before reports surfaced suggesting BIE wants a six-month pause on MGM Osaka’s construction. The potential financial implications of this construction pause are not yet fully known but are expected to be significant. Additionally, if the six-month halt is implemented, it could push the opening into 2031.
Such a delay could provide a boost to Thailand’s casino gaming ambitions. Thailand is accelerating its gaming regulations with the goal of having at least one integrated resort operational before MGM Osaka opens. Currently, this objective seems attainable, but MGM can mitigate some of this risk by participating in the Thailand bidding process — a plan the operator has confirmed it will pursue through its MGM China unit.
