During a recent Deutsche Bank conference on Tuesday (24 September), MGM’s Jonathan Halkyard expressed his excitement about Japan being “the single best development opportunity in gaming.” MGM is currently in the process of constructing the nation’s only integrated resort, MGM Osaka, in partnership with Orix Corporation of Japan and various minority investors. The venture is valued at a staggering ¥1.27tn (£6.49bn/€7.78bn/US$8.7bn).
The integrated resort, scheduled to debut in late 2030, is poised to draw in a whopping 20.5 million visitors annually, with 14 million of them being domestic visitors. Halkyard took the opportunity to discuss the prospects of Osaka at Deutsche Bank’s 32nd Annual Leveraged Finance Conference in New York. He highlighted the massive market potential in Osaka, pointing out that there are 30 million people within a three-hour rail trip and the city is geographically closer to northern China, Beijing, and Shanghai than Macau.
In a 2023 analysis by CBRE’s John DeCree, it was suggested that the development in Osaka could surpass the gross gaming revenue (GGR) of Singapore’s two casinos. It is estimated that the IR on Yumeshima Island in Osaka Bay could bring in ¥463bn in GGR annually and ¥520bn in total revenue. DeCree also emphasized the advantage MGM holds in Japan, as there is currently no other competition in the market, making them potentially the sole operator for a period of time.
Industry analysts are equally enthusiastic about MGM’s prospects in Japan. In a report dated 16 September, Jeffries analyst David Katz maintained a buy rating on the company, noting that corporate insider sentiment is positive. Halkyard’s recent purchase of 10,000 shares of MGM stock worth $340K and CEO Bill Hornbuckle’s purchase of nearly $2m in shares further strengthened investor confidence.
Recognizing MGM Resorts as one of the best undervalued cyclical stocks, financial blog Insider Monkey highlighted the future benefits the company could reap from the launch of its casino in Japan. Analysts like Clark Lampen from BTIG and JMP Securities have also reaffirmed their buy rating on MGM based on its overall performance.
In a recent turn of events, organizers of the 2025 World Expo, set to take place near the MGM Osaka site, have requested a construction delay to accommodate the six-month event. This could potentially push back the resort’s targeted opening date to the fall of 2030 and increase construction costs. However, Halkyard remains optimistic, seeing the expo as an opportunity for MGM Osaka as it provides necessary infrastructure for the integrated resort in terms of transportation and site improvements.
