2020 is shaping up to be the fateful year for Japan’s IR bidding. And front and center stands Osaka – the longtime forerunner of the nation’s IR battle planning to choose its IR gold medalist before the 2020 Tokyo Olympic Games even begin.
With Las Vegas Sands, Melco Resorts & Entertainment, Wynn Resorts and Caesars Entertainment Corp having all pulled the plug on Osaka, there are now just three operators vying to develop what will almost certainly be Japan’s first IR.
MGM Resorts, Galaxy Entertainment Group and Genting Singapore all bring strong track records to the table, albeit with each having enjoyed success in vastly different markets around the world. Likewise, all are considered to have different strengths and weaknesses. MGM boasts a globally recognized brand and has arguably been the most active of any company – publicly at least – in Japan over the past five years.
Galaxy is one of the two dominant market leaders in Macau, the world’s casino capital – and has cash reserves most rivals can only dream of. Genting Singapore is one of just two operators in Singapore, a jurisdiction envied by the Japanese for the perceived benefits of its tight regulations.
There were in fact seven operators vying for Osaka when the clock ticked over into 2019, but that all changed in August when Yokohama declared itself an official IR candidate city. Within just a few months LVS, Melco and Wynn had all abandoned their Osaka plans to target Yokohama instead, while Caesars withdrew from Japan altogether to focus instead on its US domestic operations amid a US$17.3 billion merger with Eldorado Resorts.
So who will enjoy the honor of becoming Japan’s first IR operator? Perhaps we can find some clues by taking a look over what these companies did in 2019.
The widely held perception at present is that MGM is in pole position to win Osaka’s IR favor. By far the most publicly active in recent times, the US giant has contributed to a variety of events, such as Osaka’s iconic Tenjin Festival, and has made a name for itself locally.
The company’s “Osaka First” stance has translated into more of an “Osaka Only” appeal, emphasizing their single-minded ambition for Osaka. Most of all, MGM’s consortium with local firm ORIX creates a sturdy foundation for the bid.
Ed Bowers, Representative Officer and CEO of MGM Resorts Japan, has stated, “The first Japanese IR must be the most modern and best in the world. For that purpose, partnerships with the local area are important. MGM and ORIX are in it to win it.”
At a symposium held in October 2019, the buzz among participants was that MGM was in a particularly strong position to win selection.
Asked to comment on what 2020 holds for MGM, Bowers said, “2020 will be a symbolic year for Japan in many ways. Japan will be one of the most closely watched countries in the world with the Olympic Games, but also with the nation’s steady and dynamic moves to design a whole new tourism growth model.
“An IR is one of the essential components of that model, and we are humbled and excited for the opportunity to take part in the project to create the world’s best IR in Osaka.”
GALAXY ENTERTAINMENT GROUP
MGM may be favorite, but Galaxy Entertainment Group – operator of the hugely profitable Galaxy Macau and StarWorld IRs in Macau — has reason to feel quietly confident.
Working alongside its partner Monte-Carlo Société des Bains de Mer – adding a dash of European glamour to the bid – Galaxy made a splash during the second half of 2019 as it upped the ante in Osaka while other companies withdrew altogether.
It also boasts the advantage of having cash reserves its rivals can only dream of — around US$6 billion and counting … a compelling positive at a time when Osaka rival MGM is busy selling off many of its Las Vegas assets.
Satoshi Okabe, General Manager of Galaxy Entertainment Group Japan, emphasized the company’s dedication to truly world-class facilities.
“Our specialty is attracting customers from China. Currently half of the overseas visitors in Osaka are Chinese and this is where we can showcase our skill,” he said.
Okabe told IAG that, “Galaxy Entertainment Group has great respect for the business industry and culture of Japan. We are aiming to achieve a true, world-class integrated resort here.
“We have a strong financial history in this industry and we want to share that experience and knowledge with local Japanese corporations and contribute to Japan’s economic growth and development.”
Taking a completely different tack to MGM is Genting Singapore – the quiet contender maintaining an incredibly high level of secrecy around its Osaka IR bid and rarely commenting publicly.
But it seems there is plenty going on below the surface. The company has an office in Osaka and is said to be actively crossing their t’s and dotting their i’s. According to IAG’s sources, Genting Singapore has already formed a consortium that is yet to be announced but could be at any time, basically whenever the company feels the need.
Although not the current favorite to win selection in Osaka, it’s worth noting that Genting Singapore was also a shock selection when it became the second of Singapore’s two chosen IR operators, alongside LVS, back in the mid-2000s. To this day, Resorts World Sentosa remains one of the Genting Group’s flagship operations.
No doubt the company – which holds the added advantage of operating in a jurisdiction envied by Japan’s officials – is pursuing a similar strategy to sneak under the radar of its Osaka rivals.