The approval by the Japanese government, announced on Friday, of Osaka’s Integrated Resort (IR) District Development Plan still leaves plenty of work before a tourism complex with casino can actually be opened in that Japanese metropolis, an industry commentator in Japan has told GGRAsia.

Referring to key partners on the planned scheme, Joji Kokuyro, managing director of Japan-based industry consultancy Bay City Ventures Ltd, stated: “There is still the need for Osaka and the MGM [Resorts International]/Orix [Corp] consortium to sign their final agreement, which would be the real kick off of the Osaka IR project.”

Mr Kokuyro added, referring to an artificial island in Osaka Bay that will first host an international exhibition, World Expo 2025, prior to being home for the casino resort: “Osaka still has many issues to solve in terms of the Yumeshima landfill and construction related to both the IR and World Expo…”

Other steps are required by the Japanese authorities, if Osaka (pictured) is to maintain its ambition of opening an IR in 2029.

They include the need for the Japan Casino Regulatory Commission to – as per its mandate – conduct examinations of casino operators and others, to check their suitability, before granting casino licences.

Under the liberalisation protocols, local governments wishing to host an IR must have gambling addiction countermeasures in place.

The Osaka authorities have pledged to increase by 140 percent the number of “psychiatric medical institutions” the metropolis has available for dealing with gambling addiction, prior to the expected opening of an IR.

Brokerage JP Morgan Securities (Asia Pacific) Ltd said in a note issued on Friday that “any potential impact on existing Asian casinos” from a new casino complex in Osaka would “be from 2030 at the earliest”. That, analysts DS Kim and Mufan Shi said, was “a bit too far out to make any realistic projection with a reasonable level of accuracy”.

The analysts added: “At this stage, we just conjecture that the majority of demand is likely to come from local Japanese demand – like any other major gaming jurisdictions globally – and this is likely to be created incrementally… Hence, we do not foresee any material impact on existing jurisdictions in Asia.”

2030 target possible, but tight

Daniel Cheng is a former senior vice president at Hard Rock International, a casino group that courted Hokkaido as a location for a Japanese casino resort, before that prefecture pulled out of the race.

He told GGRAsia regarding Osaka’s ambition for a resort being ready by the end of the present decade: “I think 2029 can happen if everything goes like clockwork from henceforth: but it’s more likely to be 2030 or 2031.”

Japanese media reported on Friday that the other hopeful, Nagasaki, was not mentioned at a Friday meeting of the Headquarters for the Promotion of Integrated Resorts, attended by Japan’s prime minister, Fumio Kishida, and his cabinet, that proceeded the approval announcement regarding Osaka.

Nagasaki prefecture subsequently confirmed to GGRAsia, by email, that it was continuing discussions with the national authorities regarding its casino resort plan.

Mr Cheng suggested that wider Japanese politics had a significant role to play in the decision on Osaka. He stated: “The IR is Kishida’s ‘gift’ to welcome Ishin possibly for the next general elections which could happen… in a few… months.”

“Osaka Ishin no Kai” or “Osaka Innovation”, is a political grouping governing in Osaka. At national level, there is a grouping called “Nippon Ishin no Kai” or the “Japan Innovation Party”.

“Ishin has shaped to be a potential replacement of the Komeito Party as the LDP’s ruling coalition partner,” stated Mr Cheng, referring latterly to the Liberal Democratic Party, the senior governing grouping at national level.

The potential for an Osaka IR in terms of annual earnings before interest, taxation, depreciation and amortisation (EBITDA) “could be upwards of US$2.0 billion, making it one of the most profitable casinos in the world,” said a Friday memo from CBRE Securities LLC, following the approval of Osaka’s IR District Development Plan.

Analyst John DeCree and his colleague Max Marsh noted that MGM Resorts and the Osaka authorities had forecast an Osaka IR could generate annually US$3.2 billion in gross gaming revenue (GGR) and US$3.9 billion in net revenue.

In December 2021, CBRE had suggested GGR could be as high as US$5.75 billion.

“It is possible that Osaka is such a big market MGM may not be able to build enough hotel rooms and gaming supply to fully capture our estimated total addressable market,” stated CBRE in its Friday note.

BY: 토토사이트

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