A quarter-century after gambling resorts were first proposed in Japan, officials have finally broken ground on construction of what could become Asia’s highest-grossing casino.
Executives from MGM Resorts International and Orix Corp and local politicians gathered on an artificial island in Osaka Bay on Thursday, breaking barrels of sake to signify a new beginning in Japanese tradition.
The ceremonial event marked the most tangible step that the development has taken towards realisation after years of being beset by delays and scandal.
“I’ve been working on this for more than 15 years, and no one is more happy than I am to see this happen,” said Ed Bowers, the chief executive officer of MGM Resorts Japan. “It’s not been an easy road, and we will continue to see challenges until and after this opens.”
The ¥1.27 trillion ($9 billion) project, a joint venture of MGM and the local financial conglomerate Orix, is scheduled to open in 2030. It’s likely to become the largest casino in Asia, with an estimated gross gaming revenue of $5.9 billion per year when it opens — making Japan the world’s third-largest gaming market after the US and Macau, according to Bloomberg Intelligence.
Last year, the Galaxy Macau was the largest casino in Asia, pulling in roughly $4.5 billion in gross gaming revenue.
In addition to the casino, the development will include three hotels, meeting and convention space, and a concert theatre, along with dining and shopping venues. It will sit on the outskirts of Osaka — Japan’s second largest metropolitan area — adjacent to where the 2025 World Expo is now being held for the next six months on the artificial island of Yumeshima. Japan spent about $570 million building up infrastructure to access the area.
“They’ve overcome the hurdles,” said Jay Defibaugh, an analyst at CLSA in Tokyo. “You needed significant political leadership to get this through. You had that from the Osaka government — the leadership needed to risk a lot of political capital to make this happen.”
The MGM-Orix casino will have an effective monopoly in the Japan market when it opens in 2030. Although the Japanese government allowed three casino licences to be awarded, only one has been approved. A pitch from Nagasaki Prefecture was rejected in 2023.
The initial concerns over public opposition and unclear regulation over the casino are likely past. The MGM-Orix project has investments from local companies in the Osaka region, as well as a ¥530-billion debt financing package led by megabanks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corp.
Still, the next five years could bring challenges as Japan faces a severe shortage of construction labour and competition from other markets in Asia building up casinos, as well as the growth of online betting, according to analysts.
“There’s very little doubt that it will go ahead. There’s a licence,” said Daniel Cheng, a former executive at Hard Rock International in Asia and author of a book on Japan casinos. “But whether it meets the target opening of fall 2030 — that’s not so certain because nobody’s built something like this in Japan before.”
The popularity of online gambling is also on the rise and could threaten the business model of physical casinos if it is legalised in Japan, Defibaugh said.
Last year, the number of illegal online gambling cases in Japan more than doubled, according to the National Police Agency. This week, Las Vegas Sands Corp said it would drop efforts to build a casino in New York state, partly over concerns about online gambling.
Japan legalised casinos and later passed legislation to build out gambling resorts in 2018 under former prime minister Shinzo Abe, but the idea of hosting casinos in the country had been debated as early as 1999, with support from then-Tokyo Governor Shintaro Ishihara.
Gaming executives had long coveted the potential opportunity in Japan, given its wealthy population of 124 million. Corporate executives like Las Vegas Sands late founder Sheldon Adelson and Melco Resorts & Entertainment Chairman Lawrence Ho flew to Japan, proposing to spend “whatever it takes” to build a casino and parading guests like football star David Beckham to help sell their brands.
But the initial excitement soon fizzled in the face of public opposition due to concerns about gambling addiction and money laundering, as well as the 2019 arrest of a lawmaker later found guilty of taking bribes from a Chinese company seeking to invest in a Japan casino.
Casino operators were put off by attempts to severely limit local access and lack of clarity on casino licence renewals, and getting buy-in at multiple levels of government in Japan added to the delays.
Companies like Caesars Entertainment Inc and Sands eventually withdrew of their bids for a share of the market in Japan, though many global casino operators say they are still evaluating the Japan opportunity.
Some locals are still opposed to the casino. One group is trying to stop construction and has sued Osaka officials, saying the social costs that the city will bear will be huge. To address gambling addiction concerns, Japanese customers will have to pay an entry fee for the casino, and be limited to 3 visits per week.
“There will be issues around troublesome gamblers and costs incurred by the police, judiciary and prisons,” said Mariko Inoue, an Osaka native and a member of the Association of Residents Opposed to the Casino.
“I have a strong attachment to this area and am determined to block the development.”
In contrast, local politicians and business executives at the ceremony were quick to point out the anticipated benefits for the local economy.
“I’m confident that this will serve as a catalyst for further growth,” said Osaka Governor Hirofumi Yoshimura.