US casino operators Caesars Entertainment Corp and Mohegan Gaming & Entertainment are both facing significant delays to their Korean integrated resort projects due to financing concerns caused by COVID-19.
According to South Korean news outlets, citing information from the Incheon Free Economic Zone Authority, Caesars Korea – part of the expansive project called Midan City in Yeongjong Island – and Mohegan’s Inspire are having trouble securing the final capital needed to complete their projects.
There are also reports of “disagreements” between investors with local development partners demanding all outstanding funds be fully paid and further funding secured before construction continues.
Construction at Midan City is said to have been delayed by more than eight months now after stopping on 11 February.
The future of Caesars Korea has been in some doubt over the past year following the merger between Caesars Entertainment Corp and Eldorado Resorts, with Eldorado CEO Tom Reeg – now CEO of the merged Caesars entity – stating in June 2019 that the company’s international expansion opportunity would “have to be stupendous for us to be running in that direction.”
The company subsequently stated in August 2019 that it was capping the amount of additional cash it was willing to directly invest into Caesars Korea at US$60 million – having already contributed US$80 million to the US$700 million project – with the remainder to be provided by outside financing. However, the company has spoken little publicly about its Korea project since the US$17.3 billion merger with Eldorado was completed in June of this year.
Mohegan Gaming CEO Mario Kontomerkos stated as recently as July that his company’s Inspire Korea project remained on track for a 2022 launch, adding that Mohegan remained fully committed to its international expansion efforts.
The US$1.6 billion phase one development of Inspire Korea will feature 150 gaming tables, 700 EGMs, a 15,000-seat arena, an indoor climate-controlled dome with a pool and rides, dining and retail, a 19,000-square meter conference and convention space and 1,250 hotel rooms on 1.7 million square meters of land near Incheon Airport.
“The pandemic has shown us that diversification into the international arena is important for our ability to stand for those generations, and so the project in South Korea, called Inspire, remains on track for launch in 2022,” Kontomerkos stated in an interview with casino.org.
Mohegan recently bid successfully to develop a casino resort in Greece, to be called Inspire Athens.
Korean media outlets quoted a local official as saying, “The integrated resort industry is having difficulty securing capital in the aftermath of COVID-19.
“However, Inspire is considering additional investment of equity capital so it may come up with a solution sooner or later.”