Photo/Illutration An artist's conception of the completed integrated resort for Osaka (Provided by MGM Resorts)

Osaka had a winning hand from the outset when it came to hosting Japan’s first integrated casino resort.

Submissions for two casino plans were made to the government in April 2022. One was a project backed jointly by the Osaka prefectural and municipal governments and the other was pitched by the Nagasaki prefectural government.

While approval was given April 14 to the Osaka plan, the Ministry of Land, Infrastructure, Transport and Tourism said more consideration was needed before moving ahead with the Nagasaki plan.

Although no specific reason was given for leaving the Nagasaki project on hold, sources said financing was likely a major roadblock. About 60 percent of the initial investment would have been covered by loans, but there was uncertainty about where the remaining 40 percent would come from.

In contrast, Orix Corp. had pledged to provide financial backing for the Osaka project.

The company in line to operate the Nagasaki resort also has little experience in operating a casino, whereas the Osaka project will be handled by MGM Resorts International, a veteran of the business.

While major differences between the two plans likely led to the decision to only approve Osaka as a casino resort site, doubts were also being cast about the plan to open the casino on the manmade Yumeshima island in 2029 after the end of the 2025 Osaka Kansai Expo.

In approving the Osaka plan, a panel of experts pointed out that the basis was unclear for a government projection that 20 million visitors would use the casino resort annually.

Thirty percent of that figure is forecast to come from overseas.

China in recent years has been a key source of tourists to Japan. However, the Chinese government recently began a campaign to restrict gambling, making it a crime for any organization to actively seek Chinese visitors to gambling sites abroad.

“The biggest risk will be if Chinese visitors cannot come to the casino resort,” said an Osaka business official.

A former high-ranking official at the Japan Tourism Agency, which is overseeing the casino resort project, said, “Since the central government decided to go ahead with the project, it likely did not have the option of not approving any plan”

(This article was written by Go Takahashi, Kazuhito Suwa and Tetsuya Ishikura.)

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