Posted on: January 18, 2021, 05:00h.
Last updated on: January 17, 2021, 06:40h.
Caesars Entertainment is on the clock to complete its Midan City integrated resort project on Yeonjong Island in South Korea or risk losing its license.
Construction on the $700 million Caesars Korea project has been halted since February 2020 because of the coronavirus pandemic. The Nevada-based gaming company committed $140 million to the project and is partnering on it with a China’s Guangzhou R&F Properties Co Ltd., but additional financing has been hard to procure. Just 25 percent of the construction is complete.
Reports surfaced last week that authorities in Seoul are growing tired of the lack of progress on the endeavor and are giving Caesars two months to get its house in order or risk losing the gaming permit. The US gaming company was approved for the project in 2014.
Caesars Korea is designed to be a foreigners-only casino with more than 720 rooms, suites, and villas. Caesars Korea Composite Resort is the entity that controls the project and that firm owns the land free and clear as of June 2018.
Rival Encountering Difficulties, Too
Caesars isn’t the only US-based operator encountering some headwinds in South Korea. Last August, Mohegan Gaming & Entertainment (MGE) said it plans to open its multi-billion-dollar casino resort in South Korea at Incheon International Airport in the second half of 2022.
That venue, dubbed Inspire, is now slated to open in early 2023 with the tribal gaming giant saying it expects to wrap financing on the endeavor this year. There are, however, significant differences between MGE and Caesars when it comes to international expansion. Mohegan views markets outside the US as integral its to success is putting its money where its mouth is. In addition to the South Korea venture, MGE is working on an integrated resort in Athens.
Conversely, Caesars’ international plans were formulated a previous under a previous management regime. Now under the control of the Eldorado Resorts executives that orchestrated the 2020 takeover of the Harrah’s operator, international expansion plans aren’t new Caesars’ top priority.
Following Eldorado’s June 2019 $17.3 billion acquisition offer, Caesars departed integrated resort bidding competitions in Australia, Greece, and Japan.
Further proof of Caesars’ intent to focus on the US is found in its pending acquisition of UK sportsbook operator William Hill. When that deal is finalized, it’s widely expected Caesars will rapidly sell the target’s international businesses and perhaps try to package its UK casinos into that transaction.
Assuming a glum scenario, that being Caesars scrapping the Korea project or Seoul forcing the company to do so on March 17, it’d be a setback, but not necessarily a nail in a coffin.
With Japan integrated resorts still years away from opening and within a three-hour flight of 700 million potential visitors, South Korea is a compelling market for plenty of gaming operators.
Local media reports confirming the new pressure on Caesars in South Korea don’t include speculation as to which gaming companies could replace the Flamingo operator in the country.