Japan’s Integrated Resort Sector Shows Renewed Momentum as Regulatory Path Clears
Japan’s long-stalled integrated resort (IR) industry is beginning to regain momentum.
Local news sources indicate that the Japan Casino Regulatory Commission—which issued just one of three available IR licenses in 2023—is preparing to reopen the bidding process in the upcoming year.
Japan legalized casino-integrated resorts in 2018, prompting bold predictions from analysts, some of whom projected that the industry could reach $40 billion in annual gross gaming revenue. However, the COVID-19 pandemic dampened investor enthusiasm, and a slow-moving approval process coupled with strict regulatory demands further discouraged entry into the market.
Ultimately, only one license was granted in 2023—to a consortium led by MGM Resorts International and Orix Corp. Their $8.9 billion MGM Osaka project officially began construction last month on Yumeshima Island, with a grand opening slated for 2030.
New Appointments Signal Policy Revival
Momentum returned in December, when Japan's Diet appointed new commissioners to the Casino Regulatory Commission. Among them is Takafumi Sato, a former prosecutor and key figure in shaping the country's IR regulations, who now serves as chairman. He joins newly appointed Junichi Kakimizu, former chief of the National Tax College, and reappointed commissioner Michiko Watari, a psychiatrist. They work alongside continuing members Hirofumi Kitamura, a retired law enforcement officer, and economist Keiko Ishikawa.
Market Interest and Uncertain Enthusiasm
Interest from global operators remains mixed. Las Vegas Sands Corp. withdrew from the Japan market in 2020, citing poor returns on investment. A year later, Wynn Resorts and Melco Resorts abandoned their Yokohama bids after a mayor opposed to casino development took office.
Still, signs of interest persist. According to the Hokkaido Shimbun, several prefectures—including Hokkaido—have expressed informal interest in hosting an IR. Previously, companies like Hard Rock International, Mohegan Gaming, and Rush Street had shown intent to invest in the region.
However, all eyes are on Tokyo, which could be the crown jewel of Japan’s gaming industry. The capital attracted over 540 million domestic and nearly 20 million international visitors in 2023, making it a potentially unparalleled location for casino resort development.
MGM Osaka Seen as Industry Litmus Test
According to Steve Gallaway, Managing Partner at Global Market Advisors, the performance of MGM Osaka will determine the viability of future IR investments in Japan. A successful launch could reignite developer enthusiasm and drive new bids.
Gaming analyst Howard Jay Klein noted on Seeking Alpha that MGM Osaka represents the next generation of large-scale casino resorts, calling it a “city within a city” and a response to the rising dominance of online gambling.
Economic Windfall for Osaka and Japan
Speaking at G2E Asia in Macau, Ed Bowers, MGM’s President of Global Development, said the project will generate significant economic benefits. It’s expected to contribute $1.1 billion annually to Osaka’s economy and nearly $750 million per year to Japan’s national government through taxes and entry fees.
Bowers also emphasized MGM’s advantage, as the Osaka project grants the company a five-year exclusivity period, ensuring first-mover advantage until at least 2035.