"MGM Resorts International is focused on finding the right mix of [Osaka] companies aligned in their vision and culture that we are trying to create," Chairman Jim Murren said.
Osaka, in the western Kansai region, is the first and so far only major city to enter the competition for an integrated resort license in Japan, the Nikkei Asian Review reports.
By revealing local partnerships under its "Osaka First" strategy before any of its competitors, MGM is hoping to put itself in a leading position in the bid. MGM said its Osaka project will also employ 15,000 people.
"We will include other Kansai companies in our consortium, say, more than 10 companies," said Ed Bowers, chief executive of MGM Resorts Japan, the local subsidiary of MGM, during an interview on the sidelines of the Integrated Resort Expo in Osaka last week. "MGM and Orix will each hold significant equity and other companies will have smaller equity stakes." In February, Osaka's governor at the time, Ichiro Matsui, said that any consortium bids that involve local companies would be prioritized.
The total equity will be around 500 billion yen ($4.5 billion) and be split equally between MGM and Orix, while other companies will hold minority stakes. The development is estimated to cost over 1 trillion yen, with the consortium seeking to fund it with debt, accounting for 50-60% of the total investment.
MGM Chairman Jim Murren said the 500 billion yen equity was only an "educated guess" and the operator would not make a decision until it had worked out plans with its partners and banks.
He added: "We don't have an artificial cap for the number of companies inside and outside the consortium to partner with." He said it was a matter of finding the "right mix of companies aligned in their vision and culture that we are trying to create."
Murren said the company was more keen to rope in strategic partners than equity partners, including entertainment, food and beverage and technology companies to "represent great diversity and creativity of a truly Japan resort," he said.
Some analysts said, however, that MGM may be jumping the gun as the central government in Tokyo has yet to publish its guidelines on the development of integrated resorts in the country, although Osaka has already invited the industry to present ideas. Three prefectures which hope to attract these resorts will be selected and there is some speculation that the earliest Tokyo would make any announcement would be in the fall.
A senior government official on Wednesday said the central government is likely to delay the announcement of its basic policy on integrated resorts with casinos until after the upper house election scheduled for July, since the issue stirs up public opposition.
While Murren did not address the central government's delay, he said meeting Osaka's wish to open its resort before the 2025 World Expo is "incredibly tough but not impossible." MGM, he said, will do its "best to meet that goal."
America's Las Vegas Sands and Wynn Resorts, along with Asian operators such as Melco Resorts & Entertainment, Galaxy Entertainment and Genting Singapore, have all expressed interest in the Osaka license. But MGM is leading its rivals with detailed plans to solely focus on Osaka and a partnership with a big Japanese corporation.
"MGM's exclusive focus towards Osaka is a big bet," said Brendan Bussmann, partner and director of government Affairs at Global Market Advisors. "It is too early for operators to be making potentially impactful decisions on their projects before the central government displays their path and process," Bussmann added.
On the other hand, Melco CEO Lawrence Ho told the Nikkei that the Hong Kong-based operator might bid for an operator's license on its own, without forming a consortium. Melco is interested in Osaka and Tokyo's nearby Yokohama, he said.
"We would love to have a consortium and partners, ideally we would have had a month ago," said Ho, "but at the same time, it is taking people time a bit longer." Given that Singapore and Macao had awarded licenses to single operators, Ho said the company might bring in partners later on.
After registration, Osaka wants companies to submit their concepts by August. Authorities will then ask for more detailed proposals by year-end.
The Tokyo government will announce its basic policy with detailed rules on integrated resorts, including the basic requirements for financial commitment, content and design, after setting a committee to rule and monitor casinos. Local governments interested in hosting a resort will then be able to start the bidding process, with Osaka likely to be first. Operators will probably be picked next year.
Tokyo will then award the first three licenses for integrated resorts in Japan. Osaka hopes to open its resort before it hosts the World Expo in May 2025, but some operators and analysts argue that the timing is too ambitious.