U.S. tribal gaming operator Mohegan Gaming & Entertainment (MGE) has gained full control of its casino project in South Korea after buying out its local partner.
The casino operator announced on Thursday that it has “amicably” reached a deal with its South Korean partner for the acquisition of the latter’s stake in Project Inspire, bringing the tribe’s ownership in the project to 100 percent. The tribe’s decision was driven by its desire to expand further in Asia, which it considers “the world’s fastest-growing major gaming and entertainment market.”
While MGE didn’t mention any names, there were speculations that the supposed partner that the tribal casino operator was referring to was South Korean chemicals manufacturer KCC Corp.
It would be recalled that MGE signed a deal with the Incheon International Airport Corp. (IIAC) in connection with the construction of the Inspire Integrated Resort Co. Ltd. The casino project is a consortium involving MGE, IIAC and KCC Corp.
Data showed that KCC Corp has a 24.5 percent stake in Inspire after its last reported acquisition in November 2015.
The project, which is expected to be finished in three to four years, will feature a three-tower luxury hotel complex with 1,350 five-star and six-star guest rooms, a Paramount Studios-themed indoor-outdoor amusement park, and a 20,000 square-meter casino with 250 gaming tables and 1,500 slot machines.
The Incheon casino project is MGE’s first foray outside of the United States. Currently, the casino company operates Mohegan Sun, a large-scale casino complex in Connecticut, and the Mohegan Sun Pocono in Pennsylvania, in addition to the gaming facilities it manages in Washington, Louisiana and Atlantic City.
Meanwhile, MGE reported that net revenue in its fiscal second quarter slipped due to a combination of challenging comparisons, the imposition of additional gaming taxes, and weather disruptions.
Net revenue for the three months ending March 31, 2018 stood at $332.0 million, a 1.4 percent decrease from $336.8 million during the second quarter of fiscal 2017.
MGE’s gaming revenue tumbled by 1.7 percent to $288.7 million in Q1 from $293.7 million a year ago, due to flat gross slots revenues and lower table game revenues.
Slot revenues were $197.6 million while table game revenues dwindled by 2.5 percent to $92.3 million. Non-gaming revenues of $66.0 million were relatively flat year-on-year.
MGE also reported a lower adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), with figures dropping 6.3 percent to $79.9 million. Income from operations fell 5.6% to $56.1 million, while net income attributable to MGE was down 9.1% to $28.6 million.
“Lower gaming revenues at both Mohegan Sun and Mohegan Sun Pocono were driven principally by a combination of lower overall hold and more difficult hold comparisons to the prior period,” MGE CEO Mario Kontomerkos said. “Collectively, these were the primary contributors to the year-over-year declines in Adjusted EBITDA, net income attributable to MGE and income from operations.”