Last month’s opening of the casino at Mohegan’s new South Korean integrated resort, INSPIRE Entertainment Resort in Incheon, will serve as the ultimate litmus test for the country’s foreigner-only casino industry. INSPIRE is Korea’s 17th foreigner-only casino, the ninth to be located on the mainland and without doubt also its most ambitious, given the US$1.6 billion price tag.
That hasn’t deterred Mohegan, with executives boldly proclaiming the property – Incheon’s second integrated resort after Paradise City, which opened in 2017 – will be cash-flow positive by the end of 2024. But questions will naturally remain until such time arrives.
Speaking with Inside Asian Gaming during the heart of the COVID-19 pandemic, long-time industry consultant Andrew Klebanow said he “cannot think of a more vulnerable Asian gaming market than Korea,” and not just because of COVID.
“Its [then] 16 foreigner-only casinos are wholly dependent on gamers from other nearby countries for all of their gaming revenues. This leaves the sector vulnerable to any number of threats including geo-political and natural.
“Korea’s casino industry will eventually rebound once the pandemic abates, but it will always be vulnerable to similar crippling events. Every country in East Asia that prohibits its citizens from entering casinos will never enjoy the economic impacts that integrated casino resorts can have on a nation.”
South Korea boasts just one lone casino at which locals are permitted to gamble, Kangwon Land, which, despite its remote location in Gangwon Province several hours’ drive from Seoul, still generates as much revenue as all the country’s foreigner-only casinos combined.
Nevertheless, at least some of those foreigner-only casinos have been staging a comeback post-COVID. Paradise is considered the leading foreigner-only casino operator, with four properties under its portfolio – including Paradise City. The company recently announced a profit of US$63.6 million in 2023, up some 441% year-on-year, while closest rival Grand Korea Leisure secured a US$32.8 million profit to reverse its FY22 loss.
But neither of these companies has dared to spend US$1.6 billion on an integrated resort. The closest to that mark, Lotte Tour’s US$1.4 billion Jeju Dream Tower, booked a US$152.7 million loss in 2023.
Still, Mohegan can be encouraged by the recent performances of neighboring Paradise City and their shared proximity to the sprawling metropolis that is Seoul – something that none of Jeju’s casinos benefit from.
And while it’s still early days for the casino at INSPIRE – which only opened on 3 February – the early signs for its non-gaming elements are positive. This includes its 15,000-seat multi-purpose arena … the only true arena in the country. Whether the company’s ambitious play for the Korean entertainment market is a success remains to be seen, but at least it promises to be a fun ride.
