Japanese group takes aim at MGM over alleged LeoVegas illegal gambling
Casino operator refutes claims made by group asserting LeoVegas' withdrawal from Japanese market prior to acquisition
MGM Resorts International has hit back at claims made by a Japanese gambling addiction prevention group that it illegally operated an online casino in Japan via its LeoVegas subsidiary.
The group, known as the Society for Considering Gambling Addiction Problems (SCGAP), has called for the revocation of MGM Resorts’ certification to build Japan’s first integrated resort (IR) casino in the port city of Osaka.
SCGAP claims MGM has breached Japanese administrative laws governing the IR process by operating illegally in the country via the LeoVegas online business, which it acquired in September 2022 for $603m.
In the same month MGM acquired LeoVegas, the former was selected as the preferred partner for the Osaka IR casino project, a multi-billion-dollar contract which will allow it to augment its Asian operations beyond Macau, China, and simultaneously open up a crucial new market for gambling.
“In the Osaka IR area development plan approved by the Minister of Land, Infrastructure, Transport and Tourism on 14 April 2023, the MGM Resorts International group, which is scheduled to be the operating body of the Japanese IR area, in September 2022 acquired LeoVegas, which operated an illegal online casino targeting Japanese players,” the gambling addiction prevention group claims.
“Therefore, it is very likely that MGM has taken in the criminal proceeds illegally obtained by LeoVegas. If this is true […] MGM is ineligible and will not be allowed to participate [in the IR plan].
“Therefore, the approval of the Osaka IR plan by the Minister of Land, Infrastructure, Transport and Tourism is premature, and the approval of the plan should be revoked until it is clearly confirmed that MGM has not taken in LeoVegas’ criminal proceeds,” SCGAP added.
LeoVegas confirmed it would exit the Japanese market in August 2022, a month prior to the completion of MGM’s acquisition of the Malta-headquartered operator.
“The group’s strategy is to grow on locally regulated and soon to be regulated markets, LeoVegas said in a statement at the time.“We continuously conduct strategic overviews of our group brands and the markets they are present in, seeing that we want to make sure that they fill a clear long-term purpose.”
MGM angrily hit back at SCGAP’S claims, suggesting they were “completely unacceptable” and totally unfounded, issuing a statement to defend its position.
“LeoVegas is a mobile gaming company that was once a publicly traded Swedish company until September 2022 when MGM acquired a majority stake in the company,” the statement from MGM said.
“Before completing its acquisition of LeoVegas, MGM asked LeoVegas to block access to its site from within Japan. Therefore, MGM evaluated the acquisition of LeoVegas based on the company’s business and operating conditions, excluding the Japanese market,” the operator added.