Morgan Stanley believes MGM and Las Vegas Sands have important competitive advantage in Osaka casino race
Las Vegas gaming and hospitality giants MGM Resorts International and Las Vegas Sands are the frontrunners in the race for a license for the development of an integrated resort in Osaka, brokerage firm Morgan Stanley believes.
Earlier this month, the Osaka Prefecture launched the request-for-concept application process to identify the developers who are interested in building an integrated resort with a casino on the artificial Yumeshima Island in Osaka Bay.
A number of international companies with solid experience in operating properties of this kind have already said that they have been eyeing Osaka as the potential host of an integrated resort. Aside from Las Vegas Sands and MGM Resorts International, Lawrence Ho’s Melco Resorts & Entertainment and Wynn Resorts are also among the companies that are believed to be vying for an Osaka license.
The Japanese government is set to grant three gaming licenses for casinos within larger complexes. While the gambling facilities are expected to generate a massive portion of the total revenues of the future integrated resorts, lawmakers have stated that they will only have to represent a tiny portion of the entire property. Casinos will be required to represent no more than 3% of the total floor area of the complexes and the properties will be required to feature a number of non-gambling attractions.
Why MGM and Las Vegas Sands?
Earlier this year, MGM joined forces with Japanese financial group Orix to jointly bid for the casino license in Osaka. Morgan Stanley believes that the recently announced partnership and MGM’s “Osaka-first” strategy are a big advantage that puts MGM at the forefront in what will be a highly competitive race.
As for Las Vegas Sands, the company operates Marina Bay Sands, one of the two integrated resorts in Singapore. The Japanese government crafted the country’s gaming and IR regulations after those already established in the city-state.
According to Morgan Stanley, the company’s experience in Singapore as well as its contributions to the establishment and growth of the MICE sector in Las Vegas and Macau make it a strong contender in the race for an Osaka license.
Morgan Stanley believes that Osaka officials are not likely to announce the wining bidder before late 2019 or mid-2020. A successful candidate will have to pledge massive investment in the development of an integrated resort. In addition, the winner in the license race will also have to invest $181 million for an extension of the subway to the Yumeshima Island.
Osaka also expects to have its resort operational before the 2025 World Expo, which the city has recently been selected to host.
