MGM, Osaka Alter Integrated Resort Agreement as the Timeline Shifts
LISTEN TO THIS ARTICLE:After securing the crucial go-ahead from government authorities, MGM Resorts, Orix Corporation and their minority associates are finally ready to move on to the next phase of their ambitious integrated resort (IR) in Osaka, Japan. Nonetheless, unexpected setbacks in the project's progression have compelled Osaka to alter the agreement.
Osaka IR Advances Slowly
During a call discussing financial results on May 2, MGM Chair and CEO Bill Hornbuckle indicated that the venture would like open sometime early in 2030. He further mentioned that the agreement regarding the land's lease is expected to be concluded shortly, making way for the IR's construction, which is slated to occur before or shortly after the conclusion of this year.
The initial agreement encompassed clauses enabling MGM, or any other party involved, to terminate the contract based on various conditions. However, once a specific deadline passed, their commitment solidified, preventing any further withdrawal from the $10-billion project.
That "exit window" has already closed; however, Osaka has taken the initiative to reopen it, attributing the delay to the stagnation of governmental efforts. The exit clause has been extended until the end of September.
MGM has repeatedly expressed that it remains highly optimistic about the IR's success, even though it has also indicated that it wanted to reduce its stake. In addition, analysts believe that Japan will play a huge role in Asian gambling once the industry launches.
Therefore, it isn't likely that the amended contract is the result of any unmentioned plans on MGM's part. However, because the gaming industry is highly fluid, companies have to remain as flexible as possible at all times.
Opposition Continues Fight
Despite appearing to have suffered a resounding loss, with recent polls indicating a surge in public backing for Osaka's IR, the project's opponents continue to persist in their endeavors to prevent the establishment of casinos in the prefecture. That includes, if necessary, the creation of unfounded smear campaigns to support their cause.
The Japan Tourism Agency was urged by the Association for Considering Gambling Addiction Problems (ACGAP) to revoke MGM's license for constructing the Osaka IR due to its alleged participation in the online gaming industry. Notably, MGM made a significant venture in the online casino enterprise by investing in LeoVegas last September. Prior to this, LeoVegas allowed Japanese individuals to unlawfully gamble on their platform.
MGM made a request to LeoVegas prior to the acquisition, according to a company statement. It urged the operator to restrict access to its website in Japan, although that hasn't kept MGM out of the spotlight.
Both sides assert their own version of reality; neither conceding to the other's claims. MGM has put forth the notion that it settled the matter before it became an issue. However, ACGAP says that isn't enough and wants MGM to show what it did with the money LeoVegas "illegally" earned.
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