Game on? US developer eyes multi-billion casino complex in gambling-averse Japan

A US hospitality and entertainment company plans to invest up to $9.5bn in Japanese casinos – as soon as Tokyo legalises them.

James Murren, the chief executive of MGM Resorts International, told the Reuters news agency that MGM planned to spend between $4.8bn and $9.5bn on a large-scale project combining casinos with hotels, shopping and conference space in Tokyo, Yokohama or Osaka. The company is hoping to complete this "integrated resort" by 2023.

MGM is likely to fund the investment with a real estate investment trust, or REIT. It has already set up one REIT, MGM Growth Properties, which owns 10 of its casinos and leases them to MGM Resorts.

Murren told Reuters that many blue-chip companies would look for an equity stake in the REIT. "We think there would be a tremendous amount of demand, and ultimately a public listing of these types of Japanese resorts would be very appealing," he said.

However, gambling in Japan is tightly regulated: at present it is legal only to buy lottery tickets and to bet on horse races and a few motor sports.

It has been estimated that a deregulated Japanese gambling industry would be worth around $40bn a year, and Japan’s entertainment companies have suggested that it could help revitalise the economy after the 2020 Tokyo Olympics.

Debate on an "integrated resort promotion bill", which would set casino legalisation in motion, is scheduled this month in the Japanese legislature, the diet. The bill has strong support in Shinzo Abe’s cabinet, however in the past legalisation has been repeatedly blocked by the Komeito, the Liberal Democrats’ coalition partner.  

Jay Defibaugh, leisure industry analyst at Asian investment bank CLSA, told the Financial Times in September that he thought the measure had "less than a 50% chance" of being enacted.

Based in Las Vegas, MGM has casinos across America, and also in in Macau and Hainan in China.

Image: MGM’s The Venetian resort hotel in Macau (Kennyieong/Creative Commons)

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