Mohegan Gaming & Entertainment (MGE) last week announced the successful closing of financing to develop its planned Inspire Entertainment Resort on Yeongjong Island in Incheon, South Korea.
The aggregate funding of $1.55 billion will be used in Phase 1 of development of the integrated resort (IR). The project is set to open in 2023 and could be pivotal in the revival of the South Korean tourism industry following Covid-19, the company noted.
“We have a proven track record in developing and operating leading integrated entertainment resorts in North America with our successes in Connecticut, Las Vegas and Niagara Falls, and we look forward to taking this success abroad as the first American IR launched in Korea,” said James Gessner Jr., chairman of the Mohegan Tribe and the MGE management board.
Funding needed to complete construction of the project includes a total of $575 million in equity combining MGE’s $300 million investment and the $275 million raised through global private equity firms Bain Capital and MBK Partners, and an $890 million finance loan raised through a three-bank Korean consortium that includes KB Securities, NH Investment and Securities and Hana Financial Investment.
“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,” said Bobby Soper, international president for MGE. “I’m thrilled to see our international vision for IR development reach this important milestone.”
Inspire is under construction in the Incheon Free Economic Zone, near Incheon International Airport. At buildout, it will be the largest IR in Northeast Asia. Phase 1 includes three five-star hotel towers, a 15,000-seat multifunctional professional performance arena, a foreigners-only casino, the largest convention facility in the Seoul metropolitan area, world-class retail, a year-round indoor water dome experience and a large outdoor thematic space, known as the Family Park. About 12 percent of Phase 1 has been completed, MGE said.
Due to delays caused by Covid=19, MGE sought and received permission to extend its construction deadline, with the opening date pushed to the first half of 2023 from 2022.
According to Asia Gaming Brief, the Incheon economic zone was envisaged as a foreigner-only casino and entertainment center. But so far, only Paradise City, a joint venture between Paradise Co. and Japan’s Sega Sammy, has opened its doors. Caesars Entertainment exited another project in the zone, telling shareholders it sold its investment for the price of some “barbecued pork.” Last summer, Caesars’ onetime partner in the project, R&F Properties, said there was no clear path forward in completing the resort.
AGB said industry analysts “are downbeat on the prospects for South Korea’s foreigner-only casino market” in the short term, due to the Covid crisis and concerns that Chinese tourists may not return. MGE has said the project’s non-gaming amenities will help to compensate, attracting locals from the Seoul metro area.
