MGM Japan´s IR expected to contribute over USD 774 M in annual casino tax – Bowers

Ed Bowers, president of global development of the United States-based firm, which is the parent company of Macau gaming operator MGM China Holdings, made the remarked Wednesday in a keynote speech on the opening day of G2E Asia 2022 Special Edition: Singapore, a three-day gaming industry trade show held for the first time in the Southeast Asian country.

In his keynote speech, Mr Bowers — who is also President and CEO of MGM Resorts Japan LLC — unveiled the progress and details about the resort complex MGM is planning to build with its local partner Orix Corp in a 49-hectare site in Osaka.

The MGM-Orix consortium has been selected by Osaka prefecture as its private-sector partner in its bid for a Japan IR licence. Besides Osaka, only Nagasaki prefecture also submitted its IR District Development Plan with a private-sector partner in April to the Japanese national government for a license.

“We’re hoping for an approval later this year [from the Japanese national government],” Mr Bowers said today. “Presently, we’re focused on the preparation of schematic design drawings and on the completion of the geological service of the site.”

“After we receive an approval from the central government, we will move into our detailed design work with a view to commencing site work by mid-2023. If approved, we are hopeful to complete the construction and open the IR by the end of 2029,” he said, addressing the potential timeline of the project.

“This will be the most expensive IR ever built in Asia,” the MGM executive said, as the development cost is expected to exceed 1 trillion yen. While Mr Bowers confirmed MGM’s IR in Japan is expected to contribute over 100 billion yen a year to the Japanese authorities, he did not directly comment on the annual revenue the project can generate. “We anticipate the project revenue will exceed those of most of the IRs in Asia,” he only said in the keynote speech.

It has been previously reported that the management of the MGM-Orix consortium hoped the resort could come up with annual revenue of 520 billion yen.

Part of ecosystem

The Osaka project will feature three hotel products providing approximately 2,500 rooms, a MICE space of 68,000 square metres, a 3,500-seat theatre, various Japanese cultural experiences, retail facilities and others, Mr Bowers said, adding it will employ about 15,000 people.

Despite the waning interests in the Japanese gaming market over regulatory and investment return concerns, he stressed today in his speech that MGM “continues to be highly committed” to the Asian country. “In Japan, you have to play the long game,” he added.

The executive noted the MGM project in Japan will become “part of the tourism ecosystem” in Japan.

“Japan has been very ambitious: they want to take the best of what was done in Singapore and take it to another level,” he explained. “First, they require bidders to deliver integrated resorts that will attract foreign tourists just like Singapore but also require operators to actively promote and send foreign tourists to other attractions in the areas of Japan.”

Concerning other topics, the MGM executive remarked in the keynote speech that the U.S. gaming market has already been back to the pre-Covid-19 level while “it has taken a little bit longer” for the Asian market.

He also confirmed that MGM is going to “provide a strong submission to the Macau government” to secure a new gaming licence again.

The Macau government launched in late July a fresh public tender for 10-year gaming concessions in Macau that will begin at the start of 2023, as the city’s current six gaming licences — including MGM China Holdings — will expire by the end of this year.

MGM China Holdings announced on Sunday that Pansy Ho Chiu King will remain as the managing director of MGM Grand Paradise SA for at least another 10 years should the company successfully win a licence in the new round of public tender. MGM China Holdings holds the Macau gaming rights via MGM Grand Paradise.

In a stock filing to the Hong Kong stock exchange, MGM China Holdings said Ms Ho’s stake in MGM Grand Paradise will also increase to 15 per cent from the present level of 10 per cent to meet the new tender requirements.

By Tony Lai