Osaka Citizen Group Claims MGM Resorts Not Paying Rent for IR Land
A citizen group in Osaka has recently raised concerns that MGM Resorts, the casino operator responsible for developing an integrated resort (IR) on Yumeshima Island, is not paying rent for the land currently under construction.
An aerial view of Yumeshima Island, the location for a planned integrated resort in Osaka, Japan. (Source: Getty Images)
LISTEN TO THIS ARTICLE:The group's claims have led to an audit by Osaka City's audit committee, which was prompted to evaluate the legality and appropriateness of the ongoing project. However, the committee ultimately refuted the citizen group's assertion that the development should be halted, affirming that the lack of rent payment does not constitute an illegal act.
Related: Integrated Resort in Osaka, Japan, Faces New DelaysThe controversy stems from the large-scale construction efforts on Yumeshima Island, where MGM Resorts is developing a multi-billion-dollar IR as part of a broader initiative to bolster tourism and economic growth in Osaka. According to the Japan Broadcasting Corporation (NHK), the Osaka City Audit Committee disclosed the results of an investigation into the IR project following a formal request from a citizen group in June that demanded the termination of the contract with MGM. The group argued that since the city had not received any rent for the land, despite ongoing construction activities, the arrangement was unlawful.
In its audit, the committee carefully reviewed the claims and found that the land rent issue did not breach any legal obligations, thereby dismissing the group's request to halt the project. However, the audit committee members were divided on the issue of how the construction company tasked with implementing liquefaction measures at the site was selected. The measures, which involve pouring concrete into the ground to prevent liquefaction and stabilize the land, are critical given Osaka's seismic activity and the project's location on reclaimed land.
The liquefaction measures began late last year and are expected to continue until April 2027, overlapping with the upcoming Osaka Expo in 2025. This extensive process, projected to cost approximately JPY25.5 billion ($173 million), is a pivotal step in ensuring the long-term stability of the site where MGM's resort will be built. Despite the importance of this work, some committee members expressed concerns over the fairness and legality of the construction company's selection, which was made through a discretionary contract.
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Resistance to Osaka IR Remains
This audit and the citizen group's concerns come at a time when the Osaka IR project faces additional challenges. Recently, the organizers of the upcoming World Expo, scheduled to take place in Osaka in 2025, requested that local authorities consider halting construction on the IR for about six months during the event.
The request was based on concerns about noise and visual disruptions that could affect the expo's atmosphere. However, Osaka IR KK, the entity overseeing the development of the MGM Osaka casino resort, has reportedly warned that any delay in construction could push back the resort's planned mid-2030 opening and lead to increased costs.
The NHK report highlighted that while two members of the audit committee believed there was no illegality in the construction company's selection, as the order was placed by a private entity, two others felt that potential issues could not be fully dismissed. They suggested that additional measures should be taken to ensure fairness, considering the public nature of the project.
While the Osaka City Audit Committee has cleared MGM Resorts of any illegal conduct regarding land rent, the division among committee members on other aspects of the project underscores the still-active controversy over Japan's plans to introduce casino gambling to the country.
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