Mohegan Gaming Announces Funding Plan for $1.55B Inspire Casino in South Korea
Posted on: November 29, 2021, 12:34h.
Last updated on: November 29, 2021, 05:21h.
Mohegan Gaming & Entertainment (MGE) today divulged financing arrangements for its $1.55 billion integrated resort project in Incheon, South Korea.
MGE, the gaming and hospitality unit of the Mohegan Tribe in Connecticut, announced in 2015 its plan to build a sprawling casino resort adjacent to Incheon International Airport on Yeongjongdo Island. Inspire Entertainment Resort is set to connect to the airport terminal and offer guests an array of amenities and entertainment, ranging from casino gambling to indoor and outdoor climate-controlled waterparks.
However, since its 2015 announcement, Inspire’s development has been repeatedly delayed. The setbacks have been caused by a variety of obstacles, most notably MGE struggling to secure financing. Delays were also caused by escalated political tensions between the two Koreas, with the North regularly testing missile launches in 2017 and 2018. As a result, Inspire construction only commenced in 2019.
COVID-19 further delayed the casino resort’s targeted opening from 2022 to 2023. But now, MGE says its $1.55 billion endeavor in South Korea has a path to completion.
Mohegan Gaming outlined the figures each company involved in the $1.55 billion venture is investing.
MGE says its share is $300 million. Private equity firms Bain Capital and MBK Partners are contributing $275 million. Hanwha Engineering & Construction Corporation, which is the primary general contractor for the integrated resort, is in for $85.5 million
The remaining financing — approximately $890 million — is being loaned to the development group by three South Korean banks. The financial institutions are KB Securities, NH Investment & Securities, and Hana Financial Investment.
Inspire is a major gamble and MGE’s largest investment outside of its home state of Connecticut. Mohegan officials believe it’s a bet that will pay off in the long run.
“We anticipate a significant rebound in the tourism and leisure industry following the pandemic, and we look forward to contributing to the Korean economy while at the same time opening and operating a successful, state-of-the-art resort. I’m thrilled to see our international vision for IR development reach this important milestone,” said MGE International President Bobby Soper.
Inspire will offer 1,200 five-star guestrooms, a 15,000-seat concert and sports arena, retail shopping, dozens of restaurants and bars, indoor and outdoor waterparks, and convention facilities. As for the casino, the gaming space will be reserved for foreigners only and will come with around 1,500 slot machines and 250 table games.
South Korea bans its residents from gambling everywhere other than at Kangwon Land, a government-owned casino resort in the remote Gangwon Province.
With financing in place, Mohegan Gaming says it can move forward with completing Inspire. MGE said today that the integrated resort is approximately 12 percent complete.
Mohegan is concentrating its international development efforts on South Korea after announcing its exit from Greece. That’s where the company had previously planned to build a more than $1 billion integrated casino resort in Athens.
MGE said in a statement this month that the company conducted a comprehensive review of its casinos and future commitments “against the backdrop created by the COVID-19 global pandemic.” It concluded that Athens no longer presented a favorable investment opportunity.
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