Potential delays loom over MGM’s Osaka Integrated Resort???

Jenny Ortiz August 9, 2024

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Potential delays loom over MGM’s Osaka Integrated Resort???

MGM Resorts International’s ambitious plan to open Japan’s first regulated casino resort in Osaka by 2030 may face another setback. According to reports from Japanese media, the Bureau International des Expositions (BIE), which oversees Expo 2025, has requested a six-month pause in construction on MGM’s integrated resort (IR) during the event.

The Expo is set to take place on Yumeshima Island in Osaka Bay from April to October 2025, and officials fear that ongoing construction could disrupt the aesthetics and operations of the World Fair.

Financial implications??

This potential pause in construction adds to a series of delays and challenges that have plagued the Osaka IR project. Originally, MGM hoped to complete the resort in time for Expo 2025, positioning it to capitalise on the influx of tourists expected during the event. However, the COVID-19 pandemic and subsequent bureaucratic hurdles have pushed the opening date to 2030. A six-month halt in construction could delay the project even further, possibly extending the timeline into 2031.

Such delays could significantly impact the project’s financial outlook. The resort, which already carries a hefty price tag of $9.1 billion, (€8.3 billion) may see further cost increases due to the prolonged construction timeline. MGM’s CEO, Bill Hornbuckle, recently expressed optimism about the project during a Q2 earnings call, stating that construction was “moving along nicely.” However, his comments were made before the BIE requested a construction pause, which could alter the projected timeline and financial expectations.

Thailand’s casino ambitions could gain momentum??

The delay in Osaka could also have broader regional implications. Thailand, which is actively advancing its own gaming regulations, aims to establish a competing integrated resort before MGM’s Osaka project is completed. If MGM’s opening is pushed back due to the construction pause, Thailand could launch its casino operations first, gaining early momentum in the regional market.

The Osaka IR project, which represents Japan’s first foray into legalised casino gaming, has been seen as a significant opportunity for MGM Resorts International. Despite the challenges, the company remains committed to the project. However, as construction timelines and costs continue to fluctuate, the road to opening day in Osaka remains uncertain.

Osaka officials to discuss project future with MGM??

Local media also reported that Osaka’s governor, Hirofumi Yoshimura, and Mayor Hideyuki Yokoyama are expected to meet with MGM officials soon to discuss the implications of the BIE’s request. This meeting will be crucial in determining the future of the Osaka IR project and its timeline. The outcome of these discussions will likely influence whether MGM can maintain its target opening date of 2030 or if further delays will push the project into the following decade.??