TOKYO -- Gaming giant MGM Resorts International will team up with Japanese financial services group Orix to bid for one of the country's first three casino licenses in a market that could be worth up to 1.75 trillion yen ($15.9 billion) a year.
"MGM Resorts confirms that we are working with Orix to create Japan's first Integrated Resort in Osaka," MGM Resorts Japan chief executive officer Ed Bowers said in a statement.
While several local authorities are interested in bringing an integrated resort to their region, the Las Vegas-based MGM has said that it is focusing on an "Osaka first" strategy.
Orix, a financial services group founded in Osaka, will be the first major Japanese corporation to put its hand up to operate a so-called integrated resort since Japan legalized casinos last July.
MGM and Orix are expected to be equal partners, with several companies in Osaka and other nearby cities also likely to join the consortium.
"MGM would not be a controlling party of the development," Vitaly Umansky, a senior research analyst at brokerage company Sanford C. Bernstein, said in a weekly note to clients. "This is the first clear sign the casino operators may have less than 50 percent or controlling stake.''
The resort, which will include a casino, hotels, restaurants, a conference center and other entertainment facilities, will be operated by the consortium, while MGM will manage the casino.
MGM is one of several multinational operators seeking to expand into one of the world's last untapped gaming markets.
MGM chairman Jim Murren told the Nikkei in Nov. 2018 that his company already has various links with Japan, from holding kabuki performances in one of its symbolic resorts in Las Vegas to sourcing over $30 million worth of food from earthquake-hit northeastern region of Tohoku. He said the company planned to invest "billions of dollars" in a potential resort in Japan.
Lawrence Ho, chief executive officer of Hong Kong-based Melco Resorts & Entertainment, said his company was planning to invest "more than $10 billion,'' in Japan, while U.S. based operator Las Vegas Sands announced that it was also considering a similar sized investment.
The Osaka Integrated Resorts Fundamentals Plan released last month included a development with a total floor space of up to one million square meters, with a proposal for Japan's largest international conference center. Osaka is expected to begin the search for an operator as soon as next month.
The Japanese government will establish an oversight body for the casino industry which will take effect from July, followed by the announcement of detailed integrated resort guidelines later in the year.
Local governments interested in hosting a resort will select casino operators most likely next year, with the central government to then award the first three licenses. The first of these resorts is expected to open by 2025.