American gambling behemoth, MGM Resorts International, reportedly looks best placed in the race to be selected to run the integrated casino resort being planned for the giant Japanese city of Osaka.
According to a report from GGRAsia, this is the opinion of global credit ratings firm, Fitch Ratings Incorporated, following recent decisions by rival casino operators Las Vegas Sands Corporation and Melco Resorts and Entertainment Limited to abandon their Osaka plans in favor of rival schemes due to be proposed for Yokohama and Tokyo.
Las Vegas-headquartered MGM Resorts International was one of seven foreign firms to declare in June that they would be participating in the initial request for concept (RFC) phase of the Osaka casino licensing process. However, this list of interested parties purportedly now only contains three names with Genting Malaysia Berhad and Galaxy Entertainment Group Limited also expected to take part in the Kansai city’s upcoming and more formal request for proposal (RFP) stage.
Under federal legislation ratified in July of 2018, Japan is soon set to award a trio of licenses that will give three disparate communities the right to build and operate the nation’s first Las Vegas-style integrated casino resorts. In order to be selected as the host for one of these facilities, candidate cities are being required to team up with private-sector operators before submitting their finished joint proposals to Tokyo.
Osaka is currently one of the lead runners in this process and reportedly wants to use a 121-acre plot of land on Yumeshima Island as the site for its envisioned integrated casino resort. The city of 2.6 million people purportedly hopes to have named its preferred private operating partner by the start of April in order to improve its chances at besting rival bids expected from the likes of Yokohama, Sasebo and Chiba.
For its part, MGM reportedly established a consortium with local financial services firm, Orix Corporation, in March and this vehicle has already committed to spending upwards of $10 billion via a publicly-traded real estate investment trust (REIT) in hopes of winning the right to bring an integrated casino resort to Osaka. Alex Bumazhny from Fitch told GGRAsia that this endeavor ‘was already a strong contender’ but that its chances have now been further improved following the recent moves from Melco Resorts and Entertainment Limited and Las Vegas Sands Corporation.
Bumazhny reportedly told GGRAsia…
“Our sense is that whatever ends up being built will be world-class and will be the maximum investment the winning operator could make before jeopardizing their return on investment thresholds. None of the major public operators that are left in the race are known for under-investing when looking at their recent portfolios and all have solid financial profiles as well as development and operating experience.”