Gambling is currently illegal in Japan—for now. A bill on the table could end that and, if so, a flood of casino operators will want to cash in.
One of which is MGM Resorts, which reportedly is ready to invest most $10 billion into a Japanese casino via a publicly traded real estate investment trust.
MGM Resorts CEO James Murren said that his company would spend between $4.8 billion-$9.5 billion on an “integrated resort”—a large-scale project combining casinos with hotels, shopping and conference space—in Tokyo, Yokohama or Osaka. Murrn suggested that “multiple” blue-chip companies would look for an equity stake in an MGM-led project.
"We think there would be a tremendous amount of demand, and ultimately a public listing of these types of Japanese resorts would be very appealing," Murren told Reuters in an interview.
If a law that would help legalize casinos passes the Japanese parliament, any investment by casino operators in regional resort areas would likely total 100 billion to 300 billion yen, Murren said. Potential locations for regional casinos include sites in the islands of Hokkaido in the north and Kyushu in the south. According to Reuters, an MGM spokesman said the company was only interested in investing in casinos in large metropolitan areas, and Murren suggested that one of the three main cities could have a resort as early as 2022.
Murren’s vision would have an MGM-controlled operating company responsible for expenses and investment paying rent to a property company owned by private investors and domestic and foreign companies. “There are many investors who are risk averse and looking for yield and others who are more risk tolerant," he said.