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Osaka delays plans for integrated resort

The delay to Osaka’s request-for-proposal (RFP) phase in its tilt at a casino resort, which coincides with the country tackling Covid-19, is a “reasonable” decision, said the Japan unit of United States-based casino operator MGM Resorts International, in an email to GGRAsia.

“The delay is reasonable,” a spokesperson from MGM Resorts Japan LLC told GGRAsia in an emailed reply on Friday.

The MGM brand is a favourite to be involved in any Osaka integrated resort (IR), as large-scale casino complexes are known in that country. It could be 2028  - rather than 2027 – before Osaka would be able to open such a venue, indicated on Thursday Osaka’s mayor, Ichiro Matsui.

Mr Matsui said that day that the RFP deadline would be put back by a further six months. Accordingly, the date for appointing the private-sector partner for Osaka’s IR tilt has been moved back to next year.

The MGM Resorts Japan representative said: “As mayor Matsui indicated, Covid-19 has affected business travel and the ability of members of our Las Vegas team to travel to and from Japan to meet and continue discussions with Osaka prefecture/city.”

The spokesperson however stated that the latest delay involved “no change” in MGM Resorts’ RFC plans.

“We remain fully committed to our partnership with Orix and are actively working on our proposal in response to Osaka’s RFP to realise a world class integrated resort in Osaka during the timing Mayor Matsui indicated.”

In February, the Osaka authorities said the only qualified applicant for its RFP phase was a consortium consisting of MGM Resorts and Japanese financial services group Orix Corp. Despite being the sole qualified applicant, the consortium still needs to undergo all the remaining stages of the Osaka RFC process until an official decision on the selected private-sector partner is announced by the local authorities.

In late March, the RFP deadline had been postponed to July, compared to an earlier deadline of April. Osaka city and prefecture are jointly leading the casino-resort bid process.

In his Thursday comments, Mr Matsui said that the Osaka authorities were now targeting to have such a venue open in the second half of 2027 at the earliest, or in 2028. The original target had been prior to the end of March 2027, the closing point of the country’s 2026-financial year.

“We remain committed to Osaka and will continue to work closely with the city to develop a world class integrated resort that the people of Japan can be proud of,” said the MGM Resorts Japan spokesperson.

Local governments wishing to host a casino resort will need to apply to the central authorities for the right to have one. A maximum of three resorts will be permitted in a first phase of liberalisation.

Several commentators have warned that the Covid-19 pandemic might result in an extension of the end date for the 2021 application period in which local governments in Japan must approach the national authorities for the right to host a casino complex.

The current timetable is for local governments to apply to the national government within the first seven months of 2021 for the right to host a resort, after finding a private-sector partner.

The disruption to the national economy and normal business life wrought by Covid-19 has come at a moment the local and central authorities already had full in-trays. A number of local governments has been racing to set up or complete RFC phases with casino investors, and the national government has not yet issued the final version of its so-called basic policy on IRs, which is due to set out the criteria by which schemes will be assessed.