Three months ago, the worldwide investment company Bain Capital gained control of Inspire South Korea from the developer-operator Mohegan Gaming & Entertainment. Recent reports from local media revealed that the $1.6 billion resort is now available for purchase.
However, the sale process may be complex, given that Bain does not have full ownership of the property and any new operator might need to reapply for the gaming license.
Loan default ended Mohegan’s short tenure in Korea
On February 19, Bain triggered an acceleration clause, demanding that Mohegan instantly repay $275 million in loans or relinquish control of the resort. Facing a lack of liquid assets, Mohegan surrendered control but expressed its determination to regain ownership of the property. Meanwhile, Inspire’s president Chen Si assured that operations would continue as usual with an optimistic new operator leading the way.
Inspire boasts 1,275 hotel rooms, a 15,000-seat arena, an indoor water park, conference facilities, and a prime location spanning 4.36 million square meters at Incheon International Airport. However, it struggled in its gaming operations.
Due to its failure to attract a substantial base of international gamblers, particularly Chinese VIPs, Inspire incurred a $104 million loss in its inaugural year. Mohegan attributed this deficit to high initial costs and low table revenues.
The US tribal operator argued that encountering short-term challenges is typical for new resorts of this scale and emphasized that Inspire was set up for long-term success.
Bain has not acquired legal ownership of Inspire yet
As stated by the Korea Times, Bain views the sale as a unique chance to purchase a new luxury resort with a casino license.
Nevertheless, a source disclosed that Bain has not yet gained legal ownership of MGE Korea and must first conduct a valuation of the asset used as collateral.
A potential buyer would face its own challenges, including the need to reapply for the casino license and demonstrate commitment to the conditions set by Mohegan, focusing on developing Inspire as a cornerstone of South Korea’s cultural and tourism growth.
“The license was issued to Inspire. Therefore, regardless of any changes in ownership, Inspire still has obligations to fulfill certain conditions,” a tourism ministry official informed the Times. “This includes specific investments and the construction of necessary facilities. We will continue to monitor compliance with these terms.”
Out of the 17 casinos in South Korea, only one – Kangwon Land in the remote Gangwon Province – is accessible to Korean citizens. Gaming analyst Brendan Bussmann highlighted that Inspire’s success will remain challenging until it opens to locals. Despite its advantageous airport location, visitor numbers are still a significant challenge. “You’re constantly worrying about airflow coming in and out,” Bussmann told GGB Magazine.
