Due to global inflation, MGM Resorts International's proposed casino resort in Osaka is experiencing delays and higher-than-expected costs.
In April 2022, the rights to build the integrated resort in Japan's third-largest city were granted to the Las Vegas-based casino titan and the Japanese financial services conglomerate Orix. The venue was anticipated to open at that time in the fall or winter of 2029. This deadline has now been moved to the fall or winter of 2030.

"The delay came about because the plan did not win central government approval until April of this year,” reports The Japan Times. “Once the revised plan receives central government approval, the Osaka governments aim to sign a contract with the operator for the casino resort, possibly as soon as this month.”

40% of the project is under the control of MGM, 40% of it is under Orix, and 20% is owned by a group of local investors.

Japan Casino Costs Rise Due to Inflation

There have been worries that the US casino industry will suffer from soaring inflation since the beginning of 2022. Although there is some evidence that budget-conscious consumers in local markets are cutting back on their gaming expenditures, that hasn't actually happened in earnest.

However, the rising global inflation is having an impact on the Japan casino project. Due to rising construction material costs, the initial investment required to advance the Osaka gaming venue is anticipated to increase by $1.29 billion, or 17.6%. Originally, it was estimated that the project would cost $8.1 billion, but with soaring commodities prices, that price tag is now in the $9.3 billion area.

The increased expenses will be covered by MGM and Orix, increasing their respective stakes in the project to 42.5% each, while the local consortium will only have a 15% interest.

Executives from MGM have emphasized the benefits of being a small partner in the Osaka project. They point out that status reduces initial capital outlays and risk while giving the operator a lot of room for growth.

The value of Japan Casino to MGM and Orix

The road to integrated resorts in Japan has been hampered by policy blunders, bureaucratic delays, and other hiccups, to the point where other renowned operators gave up trying to apply for licenses there.

MGM persisted with its Osaka plans, and even though there are undoubtedly problems with delays and cost overruns, the operator might benefit from its persistent approach to Japan's third-largest city. According to some estimates, the venue could bring in $4 billion in revenue in its first year of operation and, once it has fully ramped up, a return on invested capital of the teens.

According to some analysts, the Osaka integrated resort could challenge Singapore's Marina Bay Sands and Resorts World Sentosa for the title of most lucrative casino hotel in the Asia-Pacific region once it has fully ramped up.