Global casino operator MGM Resorts International says its equity commitment for MGM Osaka, Japan’s first integrated resort (IR) with casino, has increased to JPY428 billion (US$2.99 billion).
“We now have remaining about JPY392 billion to invest for our future 43.5-percent ownership stake” in MGM Osaka, stated Jonathan Halkyard, MGM Resorts’ chief financial officer. He was speaking on a conference call with analysts on Wednesday, following the release of the group’s first-quarter results.
“Despite the increase driven by updated spend estimates as we finalised our negotiations with contractors, we still have a high conviction in a high-teens percentage return on this project and remain on time to open in 2030,” added the CFO.
A ground breaking ceremony for MGM Osaka was held on April 24. Construction of the complex is expected to be completed in the summer of 2030, with the opening scheduled for around autumn of that same year.
The casino project – which has been described by MGM Resorts as a JPY1.27-trillion venture overall – is being developed at Yumeshima, an artificial island in Osaka Bay.
MGM Resorts and Japan’s Orix Corp are the two main partners in the consortium developing MGM Osaka. The project also involves a number of other Japanese businesses as minority investors.
In terms of the overall investment, Mr Halkyard said MGM Resorts’ commitment of JPY428 billion was for a 43.5-percent equity interest in the project.
“Our partners Orix and then minority shareholders make up the balance of that. And then we have a JPY530-billion credit facility on the project,” explained the CFO.
“We expect our contributions to occur over the next four years, including 2025, about US$600 million to US$700 million per year, along with our equity partners,” said the executive.
“Then the bank facility will kick in … in 2028 and carry the funding through to the opening in 2030,” he added.
Mr Halkyard also said the casino group had “already hedged over half” of its commitments to the project in the “forward yen markets,” in order “to lock in some of these favourable exchange rates”.
He added: “So, we’re all fully hedged through the middle of 2027 in terms of our equity contributions.”
MGM Resorts is the majority owner of Macau operator MGM China Holdings Ltd. The latter runs the resorts MGM Macau, on the city’s peninsula, and MGM Cotai in the Macau’s Cotai district.
MGM China margins steady
U.S.-based MGM Resorts reported consolidated net revenues of US$4.28 billion for the first quarter of 2025, a decrease of 2.4 percent from a year earlier, “due primarily to a decrease in net revenues at the Las Vegas Strip resorts and MGM China,” said the parent.
Net income attributable to MGM Resorts was US$148.6 million in the reporting period, compared to US$217.5 million in first-quarter 2024.
MGM Resorts’ consolidated adjusted earnings before interest, taxation, depreciation, and amortisation stood at US$637.1 million in the three months to March 31, compared to US$673.2 million in the prior-year quarter.
At MGM China, net revenue fell by 2.7 percent year-on-year, to US$1.03 billion in the opening quarter of 2025. That was “due primarily to a decrease in casino revenue driven by a decline in main floor table games drop compared to the prior-year quarter,” stated the parent.
The Macau operations generated casino revenue of just under US$896.0 million in the January to March period, down 2.6 percent year-on-year.
MGM China’s adjusted EBITDA stood at US$285.6 million in first-quarter 2025, a 5.2-percent decline from a year ago.
On Wednesday’s call, Bill Hornbuckle, chief executive and president of the parent, said MGM China maintained “mid-teens share” in terms of gross gaming revenue share in Macau, “ending the quarter at 15.7 percent, even with new supply ramping up in the market.”
“We were able to debut 10 new villas in MGM Macau … with another 18 opening by the end of the year,” stated the CEO.
He added: “At MGM Cotai, we are in the process of adding 60 new suites that are targeting a first quarter 2026 opening. These are new room products that will help support demand from our premium gaming customers.”
According to Mr Halkyard, MGM China’s EBITDA margin “held at 28 percent due to strong operating expenses control, and other efforts to maximise the efficiency” of the group’s assets.
In April, MGM China secured a revolving credit facility with a group of lenders, making available up to HKD23.40 billion (US$3.02 billion).
The group CFO said the facility represented “approximately US$1 billion of increased capacity,” extending MGM China’s “maturities for four years, to 2030”.
As of March 31, MGM Resorts had US$6.5 billion in principal amount of indebtedness, including US$3.0 billion related to MGM China.
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