Japan govt. greenlights MGM's $8.1B IR project in Osaka's man-made Yumeshima island

 (This story has been corrected to fix initial investment amount to 1.08 trillion yen ($8.1 billion) from 1.8 trillion yen ($13.5 billion) in the headline and paragraph 1) .

Japan approved this week a plan to build the country's first-ever casino resort in the western city of Osaka. The 1.08 trillion yen ($8.1 billion) project, set to open in 2029, is expected to boost domestic and international tourist spending.

The resort, located on the reclaimed island of Yumeshima in Osaka Bay, will feature a casino, hotels, a conference center, a shopping mall, a museum, and a ferry terminal. High-rollers will also have access to an adjacent helicopter pad. The island is set to host the World Expo in 2025.

Casinos were previously illegal in Japan, but a 2018 integrated resort (IR) law allowed for the establishment of officially approved casinos offering games such as poker and baccarat. The move was part of an effort to attract tourists to the country, which boasts a population of 126 million and is in close proximity to Asia's wealthy gamblers.

U.S. casino operator MGM Resorts International and local partner Orix Corp are leading the Osaka IR project, each holding a 40% stake in the company managing the complex. The remaining 20% is held by 20 other companies, with MUFG Bank and Sumitomo Mitsui Banking Corp providing 550 billion yen in project financing.

Prime Minister Fumio Kishida on Friday said the project would contribute to the economic growth of the Kansai area around Osaka and greater Japan after World Expo 2025, as the country aims for a post-pandemic rebound in tourist spending, as reported by Reuters.

Despite the potential economic benefits, public opinion remains divided. A Mainichi newspaper poll found 45% of Osaka residents in favor of the casino, 38% against it, and 17% undecided. Women and the elderly were more likely to oppose the project.

Japan's casino plans have faced setbacks in the past, including the coronavirus pandemic and a bribery scandal involving a high-profile lawmaker. Major casino operators such as Las Vegas Sands Corp, Caesars Entertainment Corp, and Wynn Resorts Ltd have withdrawn from planned projects.

Only Osaka and the southwestern prefecture of Nagasaki submitted bids by the April 2022 deadline. The government has delayed its decision on the Nagasaki plan, led by Casinos Austria International, without providing a reason.

Critics argue that the casino resort could exacerbate Japan's gambling problem and attract organized crime. To address these concerns, Japanese citizens will be required to pay a 6,000 yen fee for every 24 hours spent in the casino, with a portion of the fee allocated for gambling addiction measures.

Additionally, there will be a cap on the number of visits by Japanese gamblers, and family members can request that a relative be banned from using casinos.