MGM Resorts International has announced an increase in its funding commitment for the MGM Osaka IR, raising the figure to $2.99 billion
MGM Resorts International has announced an increase in its funding commitment for MGM Osaka, Japan's first integrated resort (IR), raising the figure to JPY428 billion (US$2.99 billion). The revised investment represents MGM's planned 43.5% ownership stake in the, which is being developed in partnership with Japan's Orix Corporation and several minority stakeholders.
LISTEN TO THIS ARTICLE:Following the company's first-quarter earnings release, MGM Resorts' CFO Jonathan Halkyard confirmed the updated capital expenditure. He stated that approximately JPY392 billion remains to be invested to meet the company's stake in the Yumeshima Island development.
Related: Osaka Casino Resort Breaks Ground Ahead of 2030 OpeningThe increase in projected spend was attributed to finalized negotiations with construction contractors. Despite the cost escalation, the company maintains a strong expectation of achieving a significant return on investment and remains on track to complete the project on schedule, with a targeted opening in 2030.
A groundbreaking ceremony for MGM Osaka took place on April 24, initiating the start of full-scale development of the JPY1.27-trillion resort complex. The timeline foresees construction concluding sometime in 2030, with the opening slated for the same year. The project's development is being financed through a mix of equity contributions and a significant credit facility.
MGM's equity contribution, alongside that of Orix and other investors, will be supplemented by a JPY530-billion debt facility. This structure is designed to support the project through its development and into its operational phase.
According to Halkyard, MGM Resorts' capital outlay will be spread across the next several years, with estimated annual contributions between $600-$700 million through 2025. After that period, the credit facility is expected to begin funding the remainder of the construction and development costs, continuing after the project's launch in 2030.
The company has also taken steps to mitigate foreign exchange risk, having hedged more than half of its Japanese yen commitments through the forward currency markets. This hedging strategy secures the cost of contributions through mid-2027.
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MGM Maintains Strong Asian Presence
MGM Resorts remains heavily involved in Asia through its majority ownership of MGM China Holdings Ltd., which operates two resort properties in Macau - MGM Macau and MGM Cotai. The company's first-quarter 2025 financial report showed $4.28 billion in consolidated net revenue, representing a 2.4% decline compared to the same period in 2024.
This drop was largely attributed to decreased revenues at its Las Vegas Strip resorts and Macau operations. Net income for the quarter stood at $148.6 million, down from $217.5 million year-on-year.
MGM China reported a 2.7% decline in net revenue during the first quarter of the year, amounting to $1.03 billion. This decrease was driven by a reduction in casino revenue, specifically in main floor table games activity. Casino revenue in Macau reached just under $896.0 million for the quarter, reflecting a 2.6% year-on-year decline.
Adjusted EBITDA for MGM China totaled $285.6 million, marking a 5.2% decrease from the previous year. Despite this, the company maintained a 28% EBITDA margin, supported by strict cost controls and operational efficiency measures.
MGM Resorts CEO Bill Hornbuckle noted that MGM China retained a mid-teens market share in Macau's gross gaming revenue, closing out the quarter at 15.7%. He highlighted the debut of 10 new luxury villas at MGM Macau, and added that another 18 are expected to open by the end of the year. At MGM Cotai, the company is adding 60 new suites scheduled to open in the first quarter of 2026, aimed at catering to high-end gaming customers.
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