The Japan Casino Regulatory Commission is reportedly preparing to reopen the bidding process for the country’s two remaining integrated resort (IR) licences later this year.
Japan’s integrated resort sector appears to be gaining momentum.
According to local media reports, the Japan Casino Regulatory Commission—having granted just one of the three available IR licences in 2023—is planning to reopen the application process within the next year.
Japan legalized integrated casino resorts in 2018, sparking early enthusiasm and bold forecasts—some analysts projected the market could generate up to $40 billion in gross gaming revenue annually.
However, the COVID-19 pandemic forced potential investors to shift focus to survival, causing interest in Japan’s casino market to wane. Slow progress in the bidding process and a heavy regulatory burden further dampened momentum.
In 2023, only one of the three available IR licences was awarded—to MGM Resorts and its local partner, Orix Corp. Their $8.9 billion project, MGM Osaka, officially broke ground last month on Yumeshima Island and is slated to open in 2030.
Getting back to business
Optimism around a renewed bidding process for Japan’s integrated resort licences resurfaced last December, following the Diet’s approval of new appointments to the Casino Regulatory Commission.
Former prosecutor Takafumi Sato—who played a key role in shaping Japan’s IR regulations—was named chairman. He was joined by Junichi Kakimizu, former head of the National Tax College, while psychiatrist Michiko Watari was reappointed as commissioner. They now serve alongside existing members Hirofumi Kitamura, a former law enforcement officer, and economics professor Keiko Ishikawa.
But are operators still interested in Japan’s IR market? In 2020, Las Vegas Sands withdrew, citing an imbalance between investment and expected returns. A year later, Wynn Resorts and Melco pulled out of Yokohama bids after an anti-casino mayor was elected.
Despite past setbacks, interest may be rekindling. The Hokkaido Shimbun reports that an informal government survey found “several prefectures, including Hokkaido,” expressing interest. Hokkaido had previously attracted attention from Hard Rock International, Mohegan Gaming, and Rush Street.
Still, Tokyo remains the most coveted prize. The capital, home to 37 million people, welcomed nearly 20 million international visitors and more than 540 million domestic travelers in 2023.
Osaka IR is the barometer
Steve Gallaway, managing partner at Global Market Advisors, believes investor confidence in Japan’s integrated resort market will largely depend on the success of MGM Osaka. If the property performs well, he says, it could spur momentum for more IR developments.
Gaming analyst Howard Jay Klein, writing for financial site Seeking Alpha, suggests that future operators should consider following MGM Osaka’s blueprint. He calls it the “first true mega ‘city within a city’ property,” one that redefines large-scale brick-and-mortar development as a counter to the rise of online betting.
The ambitious resort will include three hotels with 2,500 rooms, each catering to a different market segment. It will also feature 68,000 square meters of space for meetings and conventions, a shopping mall, spa, 3,000-seat theater, and over 14 restaurants.
While the casino itself occupies just 3% of the total footprint, that still equates to a massive 69,700-square-meter gaming area—housing 6,400 slot machines and 470 table games.
MGM executive: Everybody wins
Speaking at G2E Asia in Macau on Wednesday, Ed Bowers, MGM’s President of Global Development, said the MGM Osaka project is poised to deliver significant economic benefits to the region. He projected it would contribute around $1.1 billion annually to Osaka’s economy through taxes and entry fees. “In addition,” he noted, “it’s estimated to generate roughly $750 million in revenue for Japan’s national government.”
Should the government reopen the bidding process, MGM would retain its “first mover advantage” for up to five years post-opening—potentially through 2035—according to analyst Howard Jay Klein.
“Osaka’s first-mover status,” Klein remarked, “will be extremely valuable.”
