The Japan Casino Regulatory Commission has been tipped to reopen the bidding process for two vacant integrated resort licenses later this year.
The Commission only issued one of the three available IR permits in 2023, but now there could be some movement in the dormant project.
When the legal casino complexes were first approved in Japan in 2018, bullish estimates predicted the market could achieve massive gross gaming revenues of up to $40 billion a year.
This has proven to be unfounded, but in truth, the full project has never really got off the ground, beset by waning investor interest and regulatory challenges.
Two years ago, the Japanese government bestowed an operating license to MGM Resorts, working with its local partner Orix Group.
Their $8.9 billion joint venture, MGM Osaka, broke ground on Yumeshima Island last month, with the project expected to be operational by 2030.
That was one of the three licences up for grabs, but there hasn’t exactly been a surge from other operators.
Late last year, new gaming commissioners were appointed, which was expected to culminate in a new bidding process to provide a stimulus for the IR resorts.
Progress has been slow, but the dialogue continues.
Focus on Tokyo and Osaka
Las Vegas Sands Corp intimated in 2020 that the investment requirement outweighed the potential returns, while a year later, Wynn Resorts and Melco performed a U-turn on a proposed Yokohama site when an anti-casino mayor was installed.
Local press outlet, the Hokkaido Shimbun, has reported an unofficial government survey that found “several prefectures, including Hokkaido, are interested.”
Previously, Hard Rock International set a cap for Hokkaido, Japan’s second-largest island, together with Mohegan Gaming and Rush Street.
Could the capital unlock growth? Tokyo could be the gateway for a breakthrough, given the sheer numbers concentrated there.
In 2023, Tokyo hosted almost 20 million international visitors and more than 540 million domestic travellers, on top of its own population of 37 million.
Others point to Osaka, insisting that future progress and success of other sites will depend on the performance of the IR in the large port city on Honshu island.
Steve Gallaway, managing partner at Global Market Advisors, said investor interest will hang on MGM Osaka and if that venture succeeds, “there will be a push for additional development”.
Image credit: Osaka IR
