Groundbreaking on Inspire due in mid-2018
Mohegan Gaming and Entertainment, aka Mohegan Sun, has announced that it’s come to an “amicable” agreement to buy out its local partner in a South Korean casino project. No compensation was announced in the tribal gaming company’s May 3 news release, and the local partner was not mentioned by name.
Last year, South Korean chemicals manufacturer KCC Corp. was identified as a consortium partner in the project alongside MGE and Incheon International Airport Corp., reported CalvinAyre.com. According to GGRAsia, KCC said in November 2015 it had acquired a 24.5 percent stake in Inspire Integrated Resort Co. Ltd., the South Korean entity developing the Inspire project.
By shedding its local partner, the U.S.-based gaming company now owns 100 percent of the project, being developed near the airport, the main hub serving the South Korean capital of Seoul. The Mohegan tribe’s decision to take over was driven by its desire to expand further in Asia, which it considers “the world’s fastest-growing major gaming and entertainment market.”
Inspire, which is expected to be finished in three to four years, will feature a three-tower luxury hotel complex with 1,350 five-star and six-star guest rooms, a Paramount Studios-themed indoor-outdoor amusement park and a 20,000-square-meter (215,000-square-foot) casino with 250 gaming tables and 1,500 slot machines. The facility will also have a dedicated terminal for private jets.
The Incheon casino project is MGE’s first expansion outside the United States, where it operates the flagship Mohegan Sun resort in Connecticut; Mohegan Sun Pocono in Pennsylvania; and gaming facilities it manages in Washington, Louisiana and Atlantic City.
The tribal gaming group posted a 1.4 percent revenue loss for the three months ending March 31. It generated $332.0 million, down from $336.8 million during the second quarter of fiscal 2017. Gaming revenue was down 1.7 percent to $288.7 million in Q1 from $293.7 million a year ago, a loss the company attributed to flat gross slots revenues and lower table game revenues. Slots came in at $197.6 million while tables were down 2.5 percent to $92.3 million. Non-gaming revenues of $66 million were flat year-on-year. EBITDA dropped 6.3 percent to $79.9 million.
“Lower gaming revenues at both Mohegan Sun and Mohegan Sun Pocono were driven principally by a combination of lower overall hold and more difficult hold comparisons to the prior period,” MGE CEO Mario Kontomerkos said. “Collectively, these were the primary contributors to the year-over-year declines in adjusted EBITDA, net income attributable to MGE and income from operations.”
In March, Kontomerkos said the South Korea resort project would break ground “sometime during the middle of 2018” with Phase I projected to open in “about 2021.”
