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With preparations for the 2025 Osaka-Kansai Expo running behind schedule, it seems reckless to launch major new construction next to the Expo site. Unless the plan is reconsidered, it might even pose a risk to the smooth implementation of the Expo.
The Osaka prefectural government has signed an implementation agreement, which is a formal contract, with a developer to build an integrated resort (IR) that will house Japan’s first casino.
The resort is slated to be built on Yumeshima, an artificial island in Osaka City, where the site for the Expo is also located. The resort developer, led by a U.S. casino giant and Orix Corp., plans to start construction soon. With the aim of opening the resort around autumn 2030, construction of the casino and hotels is expected to get into full swing around the spring of 2025, when the Expo is scheduled to start.
A major issue is that this process will inevitably have a negative impact on the construction of the Expo, which has been already delayed.
There are only two routes — a bridge and a tunnel — connecting the center of Osaka City and Yumeshima. These routes will likely be crowded with construction vehicles for the two projects. The IR project will no doubt exacerbate a shortage of construction workers and rising material costs, factors that have caused delays in the Expo construction.
The prefectural and central governments have asked construction companies to cooperate by giving priority to the Expo. Nevertheless, it makes no sense to allow the construction of the resort to proceed simultaneously. There are also concerns that shuttle buses transporting visitors to the Expo will be caught in traffic jams caused by the IR construction.
The IR project is expected to require an investment of ¥1.27 trillion, an increase of ¥190 billion from the initial estimate due to a recent surge in material costs. The developer plans to finance the entire cost through investments and loans.
However, the implementation agreement includes a right of withdrawal that allows the developer to exit the project without penalty fees if it does so before the start of full-fledged construction. Such a withdrawal would be allowed under conditions including a continued surge in material costs that would boost the required investment amount further.
The prefectural government has accepted the developer side’s position that it was premature to make a final decision on whether to implement the project at this stage. This indicates a high degree of uncertainty.
In Japan, gambling is basically prohibited under the Penal Code. However, there are already many casinos overseas, and online casinos accessed unlawfully have also spread in Japan. Even if the Osaka casino resort goes into operation, it is questionable whether the resort will attract 20 million visitors a year as planned.
Osaka Gov. Hirofumi Yoshimura has touted the resort as “a catalyst for Osaka’s growth.” But it is extremely risky to promote such an uncertain “gamble” in a way that piggybacks on the Expo.
A casino is not compatible with the Expo’s theme of life and health. If the Expo becomes a means to promote the casino, enthusiasm for the Expo could wane.
