Frontrunners have not been named
Officials in South Korea were set to select two gaming operators who will run foreigners-only integrated resorts within the country, but eventually settled on only one, a joint venture between the U.S.-based Mohegan Tribal Gaming Authority and South Korean industrial manufacturer KCC Corp. Investment bank Morgan Stanley said other bidders were Hong Kong-listed Imperial Pacific International Holdings Ltd., U.S.-based casino management firm Global Gaming Asset Management LLC and Chinese firm Long Runn Global, and South Korean firm Ocean View.
The first phase of the Mohegan Sun project, called Inspire, will cost $1.6 billion with construction commencing in early 2017. The fully realized project will cost in excess of $5 billion. The parcel is called the Incheon Yeongjongdo ICB-II site and is located on the grounds of the Incheon International Airport, which is near the western edge of Incheon, far from any of the other proposed casinos on the peninsula. A partnership of Caesars Entertainment and the Lippo Group has already been granted a license, but construction has not yet begun and some doubt whether the project will proceed at all.
Elements of the Inspire project include:
• Three-tower luxury hotel complex with 1,350 five star and six start guest rooms
• Over 20,000 square meters of the most sought after luxury retail brands in the world and over 20 food and beverage concepts
• A 4,500-square-meter Korean cosmetics and beauty hub, promoting Korea’s dominance in Asia in this area
• The largest entertainment arena in South Korea with capacity for up to 15,000 for Class-A acts, cultural and arena sport events that have become synonymous with Mohegan Sun properties
• A Paramount Studios themed indoor-outdoor amusement park with 100,000 square meters of the latest high-tech amusement rides
• A 33,000-square-meter Eco Adventure Park featuring the latest in indoor rock climbing, zip lining, an indoor rainforest, and an archaeology experience
• A 20,000-square-meter casino with 250 tables and 1,500 slot machines
• The first and only destination resort in the world with an adjacent private air terminal (FBO)
“We are pleased with the Korean government’s decision to award us the opportunity to help fulfill their vision of driving economic development by growing tourism, creating jobs, and showcasing Korean culture via the integrated resort,” said Bobby Soper, president of MTGA following the decision.
In an interview with The Day, Soper said he was pleased with the result.
“We were somewhat optimistic, but in a very competitive process like this, you never know,” he said. “We thought our location, our partnerships and our application were very strong.”
“KCC is thrilled that its partnership with the Mohegan Tribal Gaming Authority has been awarded the opportunity to develop this exciting and transformative integrated resort which will be instrumental in bringing new generations of tourists to Incheon,” said KCC Chairman Chung Mong-Jin.
Chung Il-young, CEO of the Incheon International Airport Corporation noted, “We deeply appreciate the careful review that the Korean government has conducted on this bold new initiative for tourism in Korea. Its selection of the Inspire project at IBC-II is wonderful news for the Incheon region and will serve as a catalyst for growth in the airport development zone for years to come.”
The Korean government could have issued two licenses, but choose instead to issue only one and hold one license to possibly award at a later date.
According to the Yonhap News Agency, a total of six operators submitted proposals to South Korea’s Ministry of Culture, Sports and Tourism: four proposals for Incheon, near the capital city of Seoul; one for the southwestern port city of Yeosu; and the other for Jinhae, a southeastern port city, according to GGRAsia.
The field of bidders has dwindled dramatically in the past year. The Asia Gaming Brief reports that 34 groups initially lined up to bid on the licenses; late last year, Grand Korea Leisure, the gaming arm of the Korea Tourism Organization, withdrew from the race, to be followed by Cambodian gaming company NagaCorp. In a January note, Morgan Stanley said new casino supply did “not bode well” for South Korea, with visiting Chinese high rollers on the wane.
Meanwhile, Yonhap reported that only two candidates met the minimum investment requirement of 1 trillion won (US$811.3 million), with at least $500 million coming from foreign investors. The resorts are also required to have 1,000 five-star hotel rooms; a convention center and entertainment venues; 20,000-square meters (215,278 square feet) of retail; and a “themed area” as well as a casino. In addition, reported the Asia Gaming Brief, the gaming floor cannot comprise more than 5 percent of the total gross footage.
South Korea currently has 17 casinos, but nationals are only allowed to gamble at one, Kangwon Land in the remote Kangwon Province. Korean nationals will also be barred from gambling at Inspire, but are welcome to use the rest of the property’s amenities.
Not incidentally, a large-scale casino resort is already under construction in Incheon, which has been called the gateway to Seoul. South Korean foreigners-only casino operator Paradise Co. Ltd. and Japanese pachinko operator Sega Sammy Holdings Inc. are behind the KRW1.3 trillion (US$1 billion) Paradise City project. The resort, set to open in 2017, covers a total area of 330,000 square meters (3.55 million square feet), and will have 160 live table games, 388 electronic table games and 350 slot machines.
