Inspire Korea Depresses Mohegan FY24 Operating Results, Loan Default Possible

Posted on: January 3, 2025, 04:19h. 

Last updated on: January 4, 2025, 02:17h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Inspire Korea isn’t off to the start Connecticut-based Mohegan had hoped.

Inspire Korea Mohegan casino revenue
Business hasn’t exactly been strong at Inspire Korea, Mohegan’s $1.6 billion investment at Incheon International Airport, since it held its grand opening in March 2024. Most hotel rooms are seen dark in this photograph. (Image: X)

Mohegan, the tribal and commercial gaming firm controlled by the Mohegan Tribe, held its grand opening of the first phase of the Inspire Entertainment Resort, a $1.6 billion undertaking, last March. In Mohegan’s full-year 2024 fiscal year financial report, company officials detail that the integrated resort casino destination at Incheon International Airport has largely underwhelmed.

In the fourth quarter, Inspire resort-wide operations generated net revenue of just $62.2 million. For the year, net revenues totaled only $163.3 million.

Ari Glazer, Mohegan’s chief financial officer, said Inspire encountered increased operating costs that were primarily due to the resort’s opening, operational build-up, and low table hold.

The Inspire casino, as are most casinos in Asian markets, relies more on table games and baccarat than U.S. casinos where slot machines reign supreme. The gaming space at the Korean resort includes 150 live dealer table games, a 176-seat electronic table gaming stadium, and 373 slots.

Inspire Drags

Mohegan achieved its highest annual net revenues in company history at more than $1.88 billion, a 13% year-over-year surge. Along with the opening of Inspire, Glazer credited continued growth in Mohegan Digital and strong non-gaming revenues at U.S. resorts and in Canada for the $216.7 million increase.

Despite the record revenue, Mohegan reported that consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) went from a profit of $34.5 million in fiscal year 2023 to a loss of more than $36.1 million in FY24 — a difference of $79.6 million.   

Inspire was to blame. The company additionally warned that unless it finds new lenders in South Korea, it could default on its Korea Term Loan.

The company has upcoming debt maturities and faces an imminent debt covenant violation under its Korean Term Loan facility, which taken together present significant risks to investors,” the financial presentation warned of default.

Inspire adjusted EBITDA was a loss of $49.5 million.

Operational Difficulties 

By all accounts, Inspire so far seems to be a losing bet for Mohegan. Its potential loan default hints at deeper operational issues.

The Inspire casino won $94.7 million on its table games and just $6.8 million on its slots during the 2024 fiscal year. Mohegan’s flagship property — Mohegan Sun in Connecticut — won almost $400 million on its slots and $189.2 million on its tables during the same period.

Mohegan’s two casinos in Canada — Fallsview Casino Resort and Casino Niagara, reported gross gaming revenue (GGR) of $210.9 million. Even Mohegan Pennsylvania in the remote Pocono Mountains generated gross gaming revenue of $196.6 million.

Inspire’s hotel occupancy for the year was just 69%. The data could suggest that Mohegan’s $1.6 billion bet that foreigners arriving in Incheon and Seoul for business would be willing to stay 45 minutes outside of downtown Seoul to gamble.

Incheon remains a foreigner-only casino. South Koreans can only gamble legally at Kangwon Land, a government-owned resort in a remote area of the Kangwon Province.