Controversy erupts over MGM entertainment of Osaka IR consultant

Monday 30th of July 2018

Mainichi Shinbun broke the story on Friday that a PwC consultant working for the Osaka government on the development of IR policies was seen eating and drinking aboard MGM Resort’s Tenjin Festival boat last week, allegedly raising questions about his degree of fraternization with one of the operators expected to bid for an IR license at the Yumeshima site.

The Mainichi cited Professor Toru Mihara, who served on the central government’s Experts’ Committee last year, as saying, “That kind of entertainment is undesirable. The consulting company is in a position to influence the public offering. Considering the fact that public money is involved in the consulting contract, he should not have responded to the invitation.”

The unnamed PwC consultant himself was quoted by the Mainichi as explaining, “Although we exchanged business cards, there was no talk about work.”

The PwC consulting contract is set to run from April 2018 until February 2021, involving a total payment of more than $3.4 million. The assigned task, as described in the official bidding document, is as follows: “Based on the premise of the establishment of an IR at Yumeshima, the advisor will handle development conditions, project implementation, a review of the public offering process; and will advise on the recruitment and selection of the IR operator through the period until the operator’s contract is signed.”

Osaka Governor Ichiro Matsui, questioned by Japanese reporters about the matter on Friday, expressed his view that had it been a public official of the Osaka government who had been involved, it would be “a big problem,” but that a civilian consultant has no duty to avoid such interactions with IR operators. The fundamental reason, the governor said, is that the consultant will not have the power to select which operator will win in the bidding process.

PwC did not respond to Asia Gaming Brief’s direct inquiries by the time this story was filed.

A spokesperson for MGM Resorts, however, explained to AGB, “There were over a hundred people on the festival boat who ate a light buffet-style meal mainly consisting of hamburgers and french fries, which by any common sense definition should not be considered as some kind of special treatment.”

They added, “MGM is a company that is very strict about compliance issues, and we will continue to comply with the relevant laws and regulations of both Japan and the United States. Compliance is our top priority. Regarding contacts with those companies and individuals involved in the selection of IR operators, we will continue as before to observe compliance policies.”

The passage of the IR Implementation Act earlier this month has been unpopular with both the public and most of the domestic media, leading to a very intense degree of scrutiny of how decisions about casino-related policies are being made.