US casino and hospitality giants Caesars Entertainment Inc. and Mohegan Gaming & Entertainment are understood to face significant delays in their separate integrated complex projects in South Korea, local media reports.
The two companies are reportedly experiencing difficulties securing capital to complete the mega complexes integrated with casinos and other facilities due to disruptions caused by the global Covid-19 crisis.
Construction of Caesars Korea, which is part of a larger project called Midan City on Yeongjong Island, just off the west coast of Incheon, was delayed eight months after the works stopped in February due to the coronavirus pandemic.
The future of Caesars’ Korean project has been surrounded by uncertainty since last summer when what once operated as Caesars Entertainment Corp. announced a $ 17.3 billion alliance with the US casino operator Eldorado Resorts. The two companies closed the deal in the summer of 2020 to form Caesars Entertainment Inc.
Even before the merger was finalized, former Eldorado CEO and current CEO of the expanded group Tom Reeg said the new Caesars would focus primarily on its US casino properties and that any opportunities for international expansion would have to be “great” to be pursued.
Project Mohegan on track for launch in 2022
Caesars said in August 2019 that it would limit the amount of additional cash it would invest in its Caesars Korea plan from $ 700 million to $ 60 million. The company had already spent $ 80 million at that time. In addition, he noted that the rest would be provided by external funding, which he now seems to be struggling to get.
As for Mohegan, the company plans to build its INSPIRE Entertainment Resort on 1.7 million square meters near the Incheon airport. It is estimated that phase one of the project it will cost 1.6 billion dollars and is expected to include a casino with 700 slot machines, 150 gaming tables, a 1,250-room hotel, a heated dome-covered area with pool and various attractions, restaurants, commercial space, 19,000 square feet of meeting and convention space, and more.
Mohegan CEO Mario Kontomerkos said earlier this year that his Korean project was continuing on track to open doors in 2022 and that the company was still fully committed to its pre-pandemic international expansion plans.
Mr. Kontomerkos further noted that the pandemic really showed them that “international diversification” was crucial for the company.
Mohegan was recently selected as the winning bidder in the race for the development of a Casino complex on the site of former Athens International Airport in Greece.
Korean media also reported that there have been disagreements between the two operators and local development partners demanding that all outstanding funds be paid in full and that more funds be secured before construction works can resume in the two planned mega-complexes.