By Kantaro Komiya
TOKYO (Reuters) -Japan&nbsp;on Friday approved a plan to build the&nbsp;country's&nbsp;first&nbsp;casino&nbsp;in the western city of&nbsp;Osaka, paving the way for a large resort aimed at attracting domestic and international tourist spending.
Put forth by the city and&nbsp;Osaka&nbsp;prefecture, the project aims to open a&nbsp;casino, conference centre and other facilities in 2029 with 1.8 trillion yen ($13.5 billion) of initial investment.
Casinos were previously illegal in&nbsp;Japan&nbsp;along with other private gambling, but a 2018 integrated resort (IR) law provided exception to&nbsp;casino&nbsp;games such as poker or baccarat at officially approved establishments as part of an effort to attract tourists.
Japan&nbsp;is seen as a prized market for&nbsp;casino&nbsp;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.&nbsp;casino&nbsp;operator MGM Resorts International and local partner Orix Corp have spearheaded the&nbsp;Osaka&nbsp;IR project, with each owning a 40% stake in the company set up to manage the complex.
Another 20 companies including&nbsp;Osaka-based Panasonic, Kansai Electric Power and West&nbsp;Japan&nbsp;Railway hold the remaining 20% stake, according to a local government document.
MUFG Bank and Sumitomo Mitsui Banking Corp 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&nbsp;Osaka&nbsp;Bay, and will also include a hotel, shopping mall and ferry terminal.&nbsp;Japan&nbsp;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&nbsp;Japan&nbsp;Innovation Party retained both the office of prefectural governor and city mayor in&nbsp;Osaka&nbsp;on Sunday.
Japan's&nbsp;casino&nbsp;plans have faced a number of obstacles such as the coronavirus pandemic and a bribery scandal.
(Reporting by Kantaro Komiya; Editing by Chang-Ran Kim and Jamie Freed)

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Japan approves Osaka as site of country's first casino