MGM Resorts CEO and President Bill Hornbuckle says the company is not ‘all-in’ on plans to develop an integrated resort in Osaka as it prepares to resume negotiations over its Japanese investment.
While MGM remains hopeful of continuing on its Japanese journey, Hornbuckle was circumspect on the conditions that would make such an investment feasible as the industry emerges from the global COVID-19 pandemic.
“As you know there are a great deal of things to be worked out there,” Hornbuckle said on MGM’s 2Q20 earnings call on Friday morning (Macau time).
“We will only make this investment if we think it’s going to be prudent, if we think it’s going to pay the kind of returns that we need to meet our expectations. There is a long way to go.
“We love where we’re sitting, we love the opportunity in Osaka, we love our partner in ORIX.
“We also like that we are not fully ‘all-in’ on this investment and we like the fact that there is probably going to be a delay and a reopening of some of the conversations that will hopefully make this a better investment for anyone that is interested in it, most notably us.”
MGM Resorts was left as last man standing in Osaka following the withdrawal of both Galaxy Entertainment Group and Genting Singapore in February.
However, with COVID-19 putting international travel on indefinite hold, Osaka officials were forced to postpone the start of the city’s Request for Proposal (RFP) process.
For MGM, which says it will have a 40% to 45% stake in an Osaka IR development in which total investment had been widely speculated to exceed US$10 billion, the delay is timely given the recent loss of revenue in its key markets of Macau and Las Vegas.
“We will see over the next couple of months,” Hornbuckle said. “We were prepared by the end of July which was the latest deadline to submit an RFP. That process has been stopped. We don’t have an extension date yet but we do believe it will be delayed until the first half of next year.
“Officially we don’t know that yet but that’s the presumption. We are ready to submit either way.”