Inside Asian Gaming

October 2017 inside asian gaming 13 become a highly sought after experience.” Kontomerkos added that Mohegan Sun was “impressed with South Korea’s resilience in withstanding ups and downs in regional tensions. We are confident in the long-term growth and stability of travel and tourism trends in northern Asia.” Opinions elsewhere are divided. “The outlook for foreigner-only casinos is not good and must have the operators worried,” says Shaun McCamley, Partner and Head of Asia Operations at consulting firm Global Market Advisors. “It’s difficult to believe that pre-set revenue forecasts will be met and will more than likely fall short of expectations.” Korea’s two leading foreigner-only casino operators at present, Paradise Co and Grand Korea Leisure (GKL), have endured a difficult start to 2017 with GKL reporting a 39.8% year-on-year fall in net income to KRW15.42 billion (US$13.6 million) for the three months to 30 June. Likewise, Paradise Co saw gaming revenue fall 20.7% year-on-year for the first half of 2017 to KRW241.7 billion (US$210.3 million) on the back of a 21.6% decline in table game revenue at its four foreigner-only casinos – despite Paradise City opening its doors on 28 April. That should come as no surprise, says Union Gaming’s Managing Director and Head of Asia Equity Research, Grant Govertsen, given the enormous power China wields over Korea’s financial fortunes. “The reality is that they are very dependent on Chinese customers and therefore are very leveraged to the goodwill of the PRC,” Govertsen notes. With that in mind, he says it would also “make sense to lower the Cover Story Hong Kong-listed real estate developer Lippo, announced in early 2016 its intention to depart citing “the current outlook for the gaming industry in North Asia and the volatility of the global economy.” “We had to then basically start from scratch with finding the right partner and securing the necessary continuation of entitlements in Korea,” explains Tight. Caesars has since signed a new joint venture agreement with another Hong Kong-listed firm, Guangzhou R&F Properties, and is hoping to break ground before the end of the year. “We are still convinced that it’s critical to bring Caesars’ form of entertainment to Asia and Korea is a great flagship location given its proximity with Incheon airport and the number of tourists arriving in Korea every year,” Tight adds. It’s a similar story for Mohegan Sun, whose US$1.6 billion phase one investment is by far the largest of all three Incheon IR projects. Dubbed “Inspire”, it will boast a 20,000 square meter casino with 250 gaming tables and 1,500 gaming machines plus 1,350 hotel rooms, an indoor rainforest and adventure park and a Paramount Studios theme park. Asked if recent headwinds had given the company cause for revision, newly appointed CEO Mario Kontomerkos told Inside Asian Gaming , “Mohegan Gaming & Entertainment remains confident with our contemplated investment levels and looks forward to a very long term partnership and presence in South Korea. “These results are due to short-term issues and we don’t foresee these factors making an impact at the time of our opening. We are confident that Inspire’s unique and compelling entertainment offerings will appeal to many and quickly A rendering of Mohegan Sun ’s US$1.6 billion Inspire