South Koreans and the Asian gambling community at large have one more reason to be excited. Mohegan Sun announced a breaking ground ceremony on its much-anticipated integrated casino resort located in Incheon and adjacent to the Incheon International Airport.
The announcement came after receiving a clean bill of health to start construction courtesy of a gaming license issued in February for the project.
The same location also hosts other resorts including Paradise City which began construction about 2 years ago, Diamond City of LongRunn International, a Chinese real estate developer is set to cost about $4 billion. This particular complex looks to include other developments such as residences, hospitals, a K-pop theme park, schools, and a 7-star hotel.
Caesars is another big entrant in South Korea similar to Bloomberry, a Philippines casino developer both of whom have already started construction on their integrated resorts.
What’s more, both own land around the airport. With such activity, the city which is an hour away from Seoul could rise to become the next Macau or Vegas.
The resort announced by Mohegan Sun is set to cost about $5 billion with the first phase of Inspire’s construction set to cost $1.6 billion. This comes after Mohegan Gaming and Entertainment acquired sole ownership of the resort after buying out a local partner for $101 million.
MGE reached an agreement to buy the South Korean stake in the project to bring MGE’s total ownership to 100%. The complex will feature 150 table games in its foreigner-only casino and another 700 slot machines
The resort will also contain ample accommodation courtesy of five-star hotel rooms totaling 1,250, an arena capable of holding 15,000, a spa, retail shops and restaurants not forgetting a staggering 204,000 square feet of convention space. The resort is also set to have an exclusive air terminal.
Deal with Paramount Pictures
Theme parks have become a necessity for property developers in Asia, which is a move aimed at attracting families. For example, Jeju Shinhwa has an amusement park based on characters and brands of the renown TUBAN, a Korean 3D animation company.
Another example is the Resorts World Sentosa in Singapore which has a theme park centered around Universal Studios. Mohegan Sun is not about to get left behind. The entity struck a deal with Paramount Pictures which will see the resort incorporate Hollywood studio’s movies in its theme park.
According to Kevin Brown, Chairman of the Mohegan Tribal, the theme park is a sign of the company’s commitment to developing an integrated entertainment resort concept. However, while the first phase of Inspire is set to open doors in 2021, the Paramount theme park will wait until 2025.
Construction in Phases
According to a statement issued by MGE CEO and President, Mario Kontomerkos, the resort’s construction will be in two phases. The first is the already announced groundbreaking ceremony set to launch in early 2021. This will see the casino operational while the final phase of construction is set to complete in 2022.
During a signing ceremony held on August 1, Kang Yeonsop, the head of the Inspire Integrated Resort said they are aiming to build Northeast Asia’s largest integrated resort. With this, they expect to attract at least 10 million tourists every year.
Furthermore, this project will help actualize the airport city concept of Incheon Airport, thus attracting tourists from all over the world to the five-star resort.
Asia continues to rise as a destination for big brands to set up shop owing to its huge population, which is fertile grounds for investors. With this, companies are scrambling for a piece of the market with the new kid in the block, Integrated Resorts.
GamblingNews.com reports that Mohegan Gaming and Entertainment, based in Connecticut, has for the last few years been pushing for a global expansion of its operations into uncharted waters. This recent expansion, the Inspire integrated resort, is set to cost the company $5 billion, which is over 7 times what Caesar’s project cost of $700 million.
This move to explore international markets by tribal is a bold and risky move and is set to reap benefits, especially with the home ground market already oversaturated by bigger names.
Mohegan may have announced its groundbreaking ceremony in May 2019 and an exclusive deal with Paramount Pictures, but this comes at the backdrop of reduced earnings posted in the 4th financial quarter.
In the statement, the tribal company closed the year at $347.2 million in net revenues, which is around $15 million lower from the previous year. Revenues from gaming took a 5 percent cut to $291.1 million.
The statement in part read,
“Consistent with the company’s updated guidance, consolidated fourth-quarter revenue and Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) were below prior year results, in part due to the impact of a recent competitive opening in the northeast gaming market,”
Enjoying Thawing Tensions
In a previous report, Macau-based casinos have been in a serious crisis, which has opened doors for neighboring countries to capitalize on the brawls. Xi Jinping, the Chinese President, embarked on an anti-corruption crackdown and has seen multiple establishments lose millions in revenue, thus also resulting in a weakened economy.
South Korea seems to be a favorite destination for many companies and is set to benefit from the pessimism expressed by the Chinese administration.
Furthermore, there’s more reason for investors to look toward South Korea, especially after the brief and historic meet between President Donald Trump and his North Korean counterpart, Kim Jong-un. The meeting in itself is a joy to investors considering a peace treaty among other crunching issues were discussed.
With Mohegan being the latest entry to the scramble for Asia in the gambling scene, it’ll be interesting to see how Asia will respond to this new interest in the next few years. What’s for sure is the gambling community in this region should be ready for enhanced gaming experiences thanks to the entrance of big names in the scene.