{"id":268923,"date":"2023-04-15T01:20:34","date_gmt":"2023-04-15T06:20:34","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=268923"},"modified":"2023-04-17T17:19:06","modified_gmt":"2023-04-17T22:19:06","slug":"mgm-osaka-casino-could-be-driver-of-long-term-growth","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/","title":{"rendered":"Osaka Seen as Long-Term Growth Catalyst for MGM"},"content":{"rendered":"

After several years of waiting, the Japanese government finally made it official on Friday: Osaka will be home to the country\u2019s first casino resort.<\/p>\n

\"mgm
An artist’s rendition of an integrated casino complex in Osaka. An analyst is bullish on MGM’s future in the city. (Image: MGM\/Orix)<\/figcaption><\/figure>\n

The venue, slated to open in 2029<\/a> and carries an estimated price tag of $8.1 billion, will be 40% owned by MGM Resorts International (NYSE: MGM), 40% by Japanese financial services firm Orix and 20% by a local investment consortium.<\/p>\n

Shares of the gaming company closed modestly higher this week, indicating there was some benefit to reports that surfaced prior to official approval<\/a> of the Osaka gaming property. From here, it could be a while before Japan is material to MGM shares, but analysts believe that will happen in the future.<\/p>\n

We estimate that the property will generate around $4 billion in total sales in 2029 (its first year of operation) with earnings before interest, taxes, depreciation and amortization (EBITDA) margins in the 20s around the end of the decade, generating a return on invested capital in the teens,\u201d wrote Morningstar analyst Dan Wasiolek.<\/p><\/blockquote>\n

The risk to the Bellagio operator is that it could take several years after the initial financial contribution for the Osaka integrated resort to deliver cash flow, meaning MGM likely won\u2019t reap immediate profits.<\/p>\n

On the other hand, Osaka could pay long-term dividends for MGM while improving the operator\u2019s geographic footprint.<\/p>\n

Over Long-Term, Osaka Could Be Important to MGM Shares<\/h2>\n

Barring unforeseen developments with shorter timelines or acquisitions, Osaka will be MGM\u2019s third venue outside, joining a pair of casino hotels in Macau. It could take a while, but the Japan venue could contribute to MGM\u2019s bottom line.<\/p>\n

\u201cIn total, we see the property generating a high-single-digit percentage of company EBITDA by the end of our 10-year forecast,\u201d added Wasiolek.<\/p>\n

MGM executives have highlighted the advantages of being a minority partner<\/a> in the Osaka project. They note that status minimizes upfront capital commitments and risk while providing the operator ample upside potential.<\/strong><\/p>\n

Osaka is already a prime destination for tourists visiting Japan. The addition of the integrated resort could result in 20 million or more annual visits to the country\u2019s third-largest city. Additionally, it could be well into the 2030s —\u00a0 perhaps later \u2013 before another gaming destination opens in Japan, indicating that Osaka could enjoy monopoly-like protection for at least several years.<\/p>\n

MGM Osaka Won\u2019t Cannibalize Macau Ops<\/h2>\n

Rebounding Macau is the dominant casino destination in the Asia-Pacific region, and MGM China is gaining market share there<\/a>. Still, Wasiolek\u00a0doesn\u2019t see the Osaka venture presenting a problem to the operator\u2019s Macau properties.<\/p>\n

We don\u2019t expect the opening of the Japanese property to have a meaningful impact on demand in the Macao gaming region, which benefits from the captive opportunity of 1.4 billion Chinese citizens and an enclave of resorts,\u201d concluded the Morningstar analyst.<\/p><\/blockquote>\n

Before the coronavirus pandemic, Macau accounted for 22% of MGM\u2019s earnings before interest, taxes, depreciation, amortization, restructuring or rent costs (EBITDAR). The company owns about 56% of MGM China.<\/p>\n","protected":false},"excerpt":{"rendered":"

After several years of waiting, the Japanese government finally made it official on Friday: Osaka will be home to the country\u2019s first casino resort. The venue, slated to open in 2029 and carries an estimated price tag of $8.1 billion, will be 40% owned by MGM Resorts International (NYSE: MGM), 40% by Japanese financial services […]<\/p>\n","protected":false},"author":46,"featured_media":254036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69069,62,10],"tags":[81913,81897,81903],"acf":[],"yoast_head":"\nMGM Osaka Casino Could Be Driver Of Long-Term Growth<\/title>\n<meta name=\"description\" content=\"MGM Osaka casino could be driver of long-term international upside for operator.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"MGM Osaka Casino Could Be Driver Of Long-Term Growth\" \/>\n<meta property=\"og:description\" content=\"MGM Osaka casino could be driver of long-term international upside for operator.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-04-15T06:20:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-17T22:19:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/osaka.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1123\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/\",\"url\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/\",\"name\":\"MGM Osaka Casino Could Be Driver Of Long-Term Growth\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/osaka.jpeg\",\"datePublished\":\"2023-04-15T06:20:34+00:00\",\"dateModified\":\"2023-04-17T22:19:06+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"MGM Osaka casino could be driver of long-term international upside for operator.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/mgm-osaka-casino-could-be-driver-of-long-term-growth\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/osaka.jpeg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/01\/osaka.jpeg\",\"width\":2000,\"height\":1123,\"caption\":\"An artist's rendition of an integrated casino complex in Osaka. 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