Caesars Entertainment and Mohegan Gaming Facing Financial Issues And Delaying South Korean Projects

Article by : Helen Oct 29, 2020

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Updated: Nov 13, 2023

Historically, South Korea never was a great destination for casino fans. However, things are changing, as the country has some big plans for Incheon – a strategically important city bordering the capital of South Korea. One of the biggest projects is the Paradise City Complex that is expected to attract tourists and casino enthusiasts from all over the world. The Complex is going to include a wide range of different options, with Caesars Entertainment and Mohegan Sun expected to settle in with their own properties. The project has been in development for more than a year, and it is expected to bring as much as US$1.6 billion in a year while generating as many as 20,000 jobs.

Sadly, things are not always going as desired so that both Mohegan Gaming & Entertainment and Caesars Entertainment ran into some money-related problems that resulted in a halted development. The situations are pretty different though – for one company, there might be light at the end of the tunnel, while for the other one, nothing but question marks are on the way.

Mohegan Gaming & Entertainment (MGE) is a famous US-based casino operator owned by the Mohegan Tribe in Connecticut. Mohegan Gaming was focused exclusively on the North American market until they decided to open their first multibillion-dollar casino resort in South Korea named the Inspire Entertainment Resort. The first phase of development of the resort began back in spring 2019. As of now, the project is completed by only around 15%, which is not even one-fourth of the estimated works. However, even despite the COVID-19-related issues, Mohegan Gaming is pretty much confident about the deadlines. The company claims that the resort is about to open in the second half of 2022, just like it is set out in the original plan. More than that, MGE uses the slowdown in development as an advantage by having more time for the minor resort changes. It allows the company to implement a post-coronavirus experience with the guests’ safety being the number one priority.

The Inspire Entertainment Resort is considering the additional investment of equity capital instead of project financing, so it may come up with a solution sooner or later.

Caesars Entertainment has a whole different situation. The budget of the Midam City resort is worth more than US$700 million, while the company has contributed only US$150 million and hasn’t managed to find other sources of investments since February 2020. According to the official Ceasars Korea website, the resort will include a casino that will accept only foreign visitors, a hotel, and apartments with more than 720 rooms, villas, and some other facilities. RFCZ Korea Corp, the company that owns the Ceasars Korea project, says, “The construction works are ongoing. Civil construction and foundation works have been completed, and steel structures are going up now. The construction progress rate is over 20 percent.” As of now, the resort is completed by around 25%, but Caesars Entertainment still keeps looking for some external financing resources.

Looking for new financial backing is not that easy, as all the existing financial debts should be covered by that time. According to the greatest industry analysts, the casino operators will need a couple of years to recover after the coronavirus consequences, so finding backers that are ready to invest their own money into the unfinished projects powered by unstable companies sounds not really possible.

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