South Korean casino operator Grand Korea Leisure Co Ltd, known as GKL, is partnering with U.S.-based Mohegan Sun to build a casino resort in Incheon’s Yeongjong Island, near the country’s capital Seoul, reports the Korea Economic Daily, quoting investment banking sources.
The move marks the Asian debut of Mohegan Sun, a player in the U.S. regional casino market where it runs three casinos in Connecticut, Pennsylvania and New Jersey, respectively.
Grand Korea Leisure is an affiliate of the Korea Tourism Organization, South Korea’s official tourism agency. The casino operator is listed on the Korea Exchange.
The firm runs three foreigners-only casinos in South Korea, under the ‘Seven Luck’ brand. Two properties are located in the South Korean capital Seoul, while the other is in the southern port city of Busan, a popular tourism destination.
The Korea Economic Daily report states that the new development will have two phases, each costing KWR1 trillion (US$911.5 million), with GKL holding a 51-percent stake in the project.
The scheme, to open fully by 2020, envisages a casino-hotel with 250 gaming tables and 1,500 slot machines, to be built in a 327,000-square metre (3.51-million sq foot) plot. The development will offer 1,000 hotel rooms and entertainment amenities, including a 20,000-seat concert arena, according to the media report.
Macau junket link
It states that Mohegan Sun will bring to the project Macau junket operator Tak Chun Group and Australia-listed boutique casino operator Donaco International Ltd.
Tak Chun controlled an estimated 10 percent of the Macau market’s VIP rolling chip turnover in 2014, according to a report published in late January by Daiwa Securities Group Inc. Gross gaming revenue for VIP baccarat in Macau – another measure of the high roller business – stood at MOP212.54 billion (US$26.6 billion) for the whole of 2014, meaning that even on the relatively thin margins of Macau junket business, the privately held Tak Chun is likely to have very strong cash flows.
Donaco is currently a one-property operator, running the Aristo International casino hotel in Lao Cai, near Vietnam’s northern border with China. The company is acquiring the Star Vegas Resort and Club casino property in Poipet, Cambodia, but the deal has faced delays, according to Donaco.
Authorities in South Korea have already approved two casino projects for Yeongjong Island. One is a venture between South Korea’s Paradise Co Ltd and Japan’s Sega Sammy Holdings Inc. The other is from Caesars Entertainment Corp and Hong Kong-listed Lippo Ltd for an integrated resort expected to be ready by 2018. The casinos inside them will also be restricted to serving foreign players.
Macau casino operator SJM Holdings Ltd has reportedly been invited to be joint manager of the Paradise Co-Sega Sammy casino.
South Korea’s government in January said it would consider bids for two new foreign-players only casino projects in the country – each with a minimum investment of KRW1 trillion.
The country currently has 16 casinos for foreigners-only and one for locals, according to the University of Nevada Las Vegas Center for Gaming Research.
Revenue in the country’s foreigners-only casinos increased 0.3 percent year-on-year to KRW1.36 trillion, Yonhap reported last month, quoting central government data.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China