Mohegan Sun Now Fully Controls South Korea Casino Project ‘Inspire’
Posted on: May 5, 2018, 09:00h.
Last updated on: May 4, 2018, 06:59h.
Mohegan Sun, the casino operating unit of Connecticut’s Mohegan Tribe, is increasing its investment on the company’s first international project.
Announcing its second quarter financial results for the 2017-18 fiscal year, Mohegan Gaming Entertainment (MGE) revealed it has bought out its local development partner in South Korea to take 100 percent ownership in the under-construction integrated casino resort adjacent to Incheon International Airport. The venue, known as “Inspire,” is a $5 billion resort that will connect to its own private air terminal.
“During the quarter, we reached an amicable agreement to purchase our South Korean partner’s stake in Project Inspire … and furthering our diversification efforts in Asia, the world’s fastest-growing major gaming and entertainment market,” MGE CEO Mario Kontomerkos stated.
The first phase of the integrated resort will cost $1.6 billion, and will feature 1,350 hotel rooms, 20,000-square-foot casino with 1,500 slot machines and 250 table games, 15,000-seat theatre, retail shopping, amusement park, and multiple restaurants. The property is on schedule to open in 2020.
Mohegan Sun’s local partner in South Korea was the KCC Corporation, a construction materials company.
Mohegan Sun is in a legal juggernaut in its home state over the legality of a satellite casino it’s jointly constructing with state tribal neighbor Mashantucket Pequots. The $300 million East Windsor venue on non-sovereign land was approved by the Connecticut government on condition that the US Department of the Interior approve of the tribes’ amended state gaming compacts. To date, no such endorsement has been received.
The East Windsor casino is to prevent as many gaming dollars as possible from flowing across the Connecticut-Massachusetts border to MGM Springfield, the $960 million casino that’s to open this August. MGM Resorts has successfully convinced some Connecticut lawmakers to favor withdrawing the satellite permit in favor of holding a competitive bidding process.
Mashantucket Council Chairman Rodney Butler opined this week that tribes must come together to better combat commercial casino operators. He added that Native American groups shouldn’t focus only on regional casinos, but large-scale resorts both domestically and abroad.
Mohegan Sun isn’t the only casino operator looking to tap into South Korea. Resorts World and Caesars Entertainment are developing foreigner-only resorts, and Las Vegas Sands billionaire Sheldon Adelson reaffirmed last month that the company is still interested in entering the market should the government permit entry to residents.
Kangwon Land is the only South Korean casino currently permitted to allow locals to gamble.
Mohegan Sun’s most recent quarter disappointed. Net revenues totaled $332 million, a 1.4 percent decrease compared to the same fiscal period last year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in just short of $80 million, a more than six percent year-over-year loss.
The company said lower gaming revenues were the result of a slot tax increase in Pennsylvania, and overall lower hold percentages at its casinos.
In addition to the tribe’s casino resort in Connecticut, Mohegan Sun owns and/or operates Mohegan Sun Pocono in Pennsylvania, Resorts Atlantic City, Paragon Casino Resort in Louisiana, and Ilani Resort in Washington.