MGM Resorts announces that its casino in Japan will cost an additional $1.29 billion
MGM Resorts International announced in early September that its casino in Japan would be delayed by inflation and higher-than-expected construction costs. In the end, the firm associated with Orix Group will have to invest $1.29 billion, in addition to the $8.1 billion initially planned, to take advantage of the Japanese territory.
Inflation hits project hard
MGM Resorts International, a Las Vegas-based casino company, joined forces with Orix Group, a Japanese financial services conglomerate, in April 2022 to build a casino resorts in Osaka. Japan’s third-largest city was due to open its doors in autumn or winter 2029. A few days ago, the partners announced that the deadline had now been set for autumn or winter 2030, one year later.
MGM and Orix initially controlled 40% of the project. The delay announced by MGM was due in large part to the rising costs of completing the project.. This increase and global inflation are also pushing the initial investment to be reviewed.
Instead of the $8.1 billion originally planned, $9.3 billion will be required, 1.29 billion more. This additional investment will be made by MGM and Orix, which in return allows them to increase their share to 42.5%.
” The initial investment required for the Osaka gaming facility is set to increase by $1.29 billion, or 17.6%, which is due to the rising cost of building materials “according to a press release from MGM Resorts.
Despite this additional investment, the planned expenditure for this casino resorts in Japan is still deemed “profitable” by MGM and Orix. Japan is a territory that should rank among the world’s top casino destinations, and Osaka, as a very large city of over 2.7 million inhabitants, is a safe place to attract gamblers.
According to some estimates, the establishment could generate some $4 billion in sales in its first year.