The prospect of more international casino operators dropping out of Japan’s IR race doesn’t mean that their already established consortia’s would fall apart – even if such sudden departure happened after they had won approval from a location city or prefecture.
According to Joji Kokuryo, Managing Director of Bay City Ventures, major consortia partners could in theory swap out their original operator partner before submitting their IR business plan to the central government – potentially opening the door for a late entrant to emerge in places like Osaka.
“Osaka is the most interesting one right now because they could go in a multitude of directions, and how MGM handles the situation they are in directly affects Osaka because they only have one consortium bid,” said Kokuryo during the sixth edition of IAG’s GAME online business platform on Thursday titled, “Japan: where to now?”
Taking Osaka as an example – where MGM Resorts has partnered with local company Orix – the Yokohama-based consultant said there was nothing stopping any major member of a Japan IR consortia from swapping out their partners even if that consortium had already won local approval.
“There is a reason that Japan is doing this bidding by consortium,” Kokuryo said.
“Legally speaking, it could be Operator A when you make your bid to Osaka and get the right to bid with Osaka, but it could be Operator B when you make your bid to the national government.
“That’s why Osaka is exciting because even if MGM backs out, as long as Orix stays then that whole procedure does not need to start from scratch.”
The topic of how consortia might move forward in such circumstances was raised following recent comments made by MGM CEO and President Bill Hornbuckle suggesting the company harbors some reservations on Japan in light of its tight regulatory environment and the added financial pressures brought about by COVID-19.
“It’s a consortium so any of the members can change,” Kokuryo said.
“It wouldn’t be very smart, I don’t think anyone would actually pull out, but theoretically speaking if one of them doesn’t want to do it, the other has the right to bring in a new partner. In theory it could be a Genting-Orix partnership by the time it gets to the national government
“As long as it’s one of the main members of the consortium that stays, it can happen.”