By Kantaro Komiya

Put forth by the city and Osaka prefecture, the project aims to open a casino, conference centre and other facilities in 2029 with 1.8 trillion yen ($13.5 billion) of initial investment.

Casinos were previously illegal in Japan along with other private gambling, but a 2018 integrated resort (IR) law provided exception to casino games such as poker or baccarat at officially approved establishments as part of an effort to attract tourists.

Japan is seen as a prized market for casino operators because of its affluent population of 126 million and proximity to Asia’s wealthy gamblers, although opinion polls have shown many citizens worry about addiction and crime.

U.S. casino operator MGM Resorts International MGM.N and local partner Orix Corp 8591.T have spearheaded the Osaka IR project, with each owning a 40% stake in the company set up to manage the complex.

Another 20 companies including Osaka-based Panasonic 6752.T, Kansai Electric Power 9503.T and West Japan Railway 9021.T hold the remaining 20% stake, according to a local government document.

MUFG Bank 8306.T and Sumitomo Mitsui Banking Corp 8316.T will provide 550 billion yen in project financing for the resort, the document showed.

The 492,000-square-metre resort complex is located on Yumeshima, a reclaimed island in Osaka Bay, and will also include a hotel, shopping mall and ferry terminal. Japan will host the World Expo on the island in 2025.

The resort is targeting 520 billion yen of revenue annually, mostly from the gaming business, and forecasts it will attract 6 million international tourists and 14 million domestic visitors, the project document showed.

The national government’s decision came after the pro-casino Japan Innovation Party retained both the office of prefectural governor and city mayor in Osaka on Sunday.

Japan’s casino plans have faced a number of obstacles such as the coronavirus pandemic and a bribery scandal.