Inspire Korea disappoints Mohegan FY24 operating results

Posted: January 3, 2025, 04:19 pm.

Last updated: January 3, 2025, 04:19 pm.

Inspire Korea hasn't gotten off to the start that Connecticut-based Mohegan had hoped for.

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

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

Inspire Casino, like most casinos in Asian markets, relies more on table games and baccarat than American casinos where slot machines reign supreme. 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 revenue in company history of more than $1.88 billion, an increase of 13% year-over-year. With the opening of Inspire, Glazer credited continued growth at Mohegan Digital and strong non-gaming revenues at U.S. resorts and Canada for the $216.7 million increase.

Despite record revenues, Mohegan reported that consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) went from a profit of $34.5 million in FY23 to a loss of more than $36.1 million in FY24 – $79.6 Difference of million.

Inspiration was to blame. The company additionally warned that unless it found new lenders in South Korea, it could default on its Korea term loan.

“The company has upcoming debt maturities and faces imminent debt covenant violations under the Korean Term Loan Facility, which in the aggregate presents significant risks to investors,” the company warned of the default in the financial presentation.

Inspire adjusted EBITDA was a loss of $49.5 million.

operational difficulties

By all accounts, Inspire appears to be a losing bet for Mohegan so far. Its potential debt default indicates deeper operational issues.

Mohegan's two casinos in Canada – Fallsview Casino Resort and Casino Niagara – recorded gross gaming revenues (GGR) of $210.9 million. Even Mohegan Pennsylvania, located in the remote Pocono Mountains, generated gross gaming revenues of $196.6 million.

Inspire's hotel occupancy for the year was only 69%. Mohegan's $1.6 billion bet is that foreigners coming to Incheon and Seoul for business would be willing to stop 45 minutes outside downtown Seoul to gamble, data shows.

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