Bill Hornbuckle, CEO and President of MGM Resorts International, reaffirmed the company’s commitment to the Osaka, Japan casino project, which is set to become the country’s first integrated resort. While the budget remains at the previously stated US$10 billion, Hornbuckle acknowledged that the project’s scope has evolved, with approximately 20 to 25 percent less gross floor area (GFA) than originally planned.
Scope Adjustments but No Budget Changes
Hornbuckle emphasized that despite scope changes, the budget will not be reduced, and the casino’s size will remain unchanged. He acknowledged the complexity of maintaining the budget while adapting the project’s scale to current conditions.
Agreements and Timelines
Hornbuckle mentioned plans to fly to Japan to sign the final agreements for the project at the end of the month. These agreements include an implementation agreement and a lease for the Yumeshima island site, located in Osaka Bay. This signifies the project’s earnest commencement, with a target opening date in 2030, a year later than initially hoped by Osaka authorities.
Financial Considerations
While the Osaka authorities revealed that the project’s initial development cost would be 17.6 percent higher than the previous estimate, Hornbuckle noted that the depreciation of the Japanese yen against the U.S. dollar has somewhat offset this increase. He underlined that the earning potential of MGM Osaka remains unchanged.
Strategic Location and Market Potential
Hornbuckle expressed excitement about the project’s potential, citing Japan’s large population and Osaka’s significant urban center. He highlighted the project’s proximity to major Chinese cities like Shanghai and Beijing, potentially drawing visitors from northern China. Additionally, he emphasized MGM’s expertise in serving diverse markets, including Japan.
Project Timeline
MGM Resorts expects to begin pylon construction by spring, with work extending into 2024 and early 2025. The company plans to drill piles to reach bedrock for the project’s foundation, followed by the commencement of hard construction.
Investment Structure
Hornbuckle revealed that MGM Resorts and partner Orix would increase their share in the project to 42.5 percent from 40 percent, while smaller investors’ collective stake would decrease to 15 percent.
MGM Resorts remains committed to the Osaka casino project despite scope changes and financial adjustments. The project’s strategic location and market potential in Japan are seen as strong drivers of future success. With a budget of US$10 billion and a targeted opening in 2030, MGM Osaka aims to become a significant player in Japan’s emerging integrated resort industry.