MGM Resorts International and financial services group Orix Corp. are seeking up to 10 local partners to share the costs of their planned ¥1 trillion integrated resort project in Japan, the Nikkei Asian Review reported May 23.
MGM Resorts Japan CEO Ed Bowers made the statement at the sidelines of the recent Integrated Resort Expo in Osaka, the newspaper said.
The Las Vegas-based hotel and casino operator has committed to giving the local companies that will participate in the Osaka project small equity stakes in the planned casino, according to the report. MGM and Orix, meanwhile, will each hold significant ownership in the new company.
The news comes two months after Bowers confirmed to the Nikkei that MGM has teamed up with Orix to bid for one of Japan's three casino licenses after the country legalized casinos in July 2018.
"MGM Resorts confirms that we are working with Orix to create Japan's first Integrated Resort in Osaka," Bowers told the Nikkei at the time.
Most recently, the newspaper said the development is expected to cost more than ¥1 trillion, with the consortium seeking to fund 50% to 60% of the total investment with debt.
Bowers reportedly said in an interview with the Nikkei that MGM will include more than 10 companies from the Kansai region in their consortium. The total equity will be approximately ¥500 billion, which will be equally split between MGM and Orix, with other companies to hold minority stakes, according to the newspaper.
Meanwhile, MGM Chairman Jim Murren reportedly told the Nikkei during the 15th CLSA Japan Forum that the ¥500 billion equity figure was only an "educated guess," and that the company has yet to make a decision until it finishes working out plans with its partners and banks.
"We don't have an artificial cap for the number of companies inside and outside the consortium to partner with," Murren reportedly said. He added that MGM is more likely to forge strategic partnerships with companies in the entertainment, food and beverage and technology space than forming equity partnerships.
MGM is up against rivals Las Vegas Sands Corp., Wynn Resorts Ltd., Melco Resorts & Entertainment Ltd., Galaxy Entertainment Group Ltd. and Genting Singapore Ltd., which have all expressed interest in the Osaka license, according to the report.
Melco CEO Lawrence Ho reportedly told the Nikkei that the Hong Kong-based casinos and gaming company, which is interested in building casinos in Osaka and Yokohama, could bid for its own operator's license, instead of forming a consortium.
The newspaper said the city of Osaka wants companies to submit their concepts by August after filing their registrations and then detail their proposals by year-end. Operators will likely be selected in 2020, as Osaka is looking to open its resort before it hosts the World Expo in May 2025, the report added.
Meanwhile, in the U.S., MGM pulled out of talks to acquire Wynn Resorts' Encore Boston Harbor resort in Massachusetts, which is under development, following shareholder anxiety and pressure from local officials.
As of May 23, US$1 was equivalent to ¥109.67.