The passage of legislation in 2018 created the opportunity for three Japanese cities to build casinos. For the past several years, MGM Resorts International (NYSE: MGM) has been among the companies pushing to land a highly coveted position in the Japanese casino market.
The company is now one step closer.
What Happened: MGM Resorts and its joint venture partner ORIX were selected by Osaka as the region’s “integrated resort partner.”
MGM showed off highlights of its $10 billion planned development to create a resort in Osaka. The company’s vision is to create “one of the world’s top entertainment and hospitality destinations” that will create a tourism spike in Japan.
Plans call for MGM to build three hotels totaling 2,500 rooms, 400,000 square feet of conference facilities and a 3,500 seat theater.
“It is an honor to be selected as Osaka’s partner in developing an integrated resort. I commend the city in undertaking a comprehensive and thoughtful process to meet its goal of developing a world-class integrated resort in Osaka,” said MGM Resorts CEO Bill Hornbuckle.
Why It’s Important: The selection of the MGM ORIX resort is one of several steps needed for a casino to be built. The companies will submit an area development plan to Japan’s government during an application period of October 2021 to April 2022.
Casino licenses are expected to be issued by the Japanese government in 2022. A resort from MGM and ORIX could be opened in the second half of the 2020s according to the press release.
“Nowhere is the future of tourism and hospitality more exciting than Japan,” Hornbuckle said.
Tuesday’s presentation highlighted an estimated 20 million annual visitors to the casino.
Legalizing casinos in Macau became a major event for casino operators who saw the region as a new growth area. Singapore and the Philippines have also seen success for companies who were able to obtain casino and resort licenses.
MGM is a diversified casino and sports betting company with casino operations in the U.S., China and a joint venture sprots betting arm called BetMGM with Entain ADR (OTC: GMVHY).
Second-quarter revenue for MGM Resorts of $2.3 billion was split as $1.0 billion from Las Vegas, $856 million from regional casinos and $311 million from MGM China.
MGM shares could have growth ahead with the possibility of spinning off or acquiring the entire BetMGM stake. Landing a license in Japan could be seen as a big win for the company with the limited number of licenses offered in what could become the next great casino growth market.
See more from Benzinga
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.