Caesars building their First Asian Casino in South Korea

Caesars Entertainment has largely stood by while competitors like Wynn Resorts and the Las Vegas Sands Corp have cashed in on the Asian gambling boom. Apparently, Caesars is tired of being on the sidelines because they’re now set to build their first Asian casino resort in South Korea.

Along with their partners, Singapore’s OUE Ltd and Hong Kong’s Lippo Ltd, Caesars will be the first company to develop a large-scale casino resort in South Korea. The Land of the Morning Calm has always proceeded cautiously with regard to gaming, only giving their own residents access to one remote casino. South Korea also houses 16 other small casinos, however, these are only open to foreign visitors.

As for Caesars’ project, it will cost US$2.2 billion and will be built near the Incheon International Airport on Yeongjong Island. The goal is to have the casino up and running before the 2018 Winter Olympics begin in PyeongChang, South Korea.

One important aspect worth mentioning here is that the country’s government maintains that they’ve only temporarily approved Caesars to build a casino. This means that if their conditions aren’t meant, they have the right to revoke the preliminary gaming license. Here’s a quick look at the main conditions that need to be satisfied:

– Caesars/OUE/Lippo must build a 5-star hotel at the complex.
– The group has to invest at least $500 million into the project over the course of 3.5 years.
– The South Korean government may prevent the group from operating the casino until at least $700 million is invested into the property.

Despite what seems like stringent conditions, the Caesars consortium was very eager to land this preliminary license. They applied last year and were rejected in June over concerns about Caesars’ low credit rating from Moody’s Investors Service. South Korea also rejected an application from Japan’s Universal Entertainment Corp in June.

Only the Caesars consortium reapplied, and they recently won the preliminary license that’s dependent upon them meeting the previously described conditions. With the application approved, Caesars is set to own 40% of the new resort, OUE will also own 40% while Lippo will maintain 20% of the investment.

This is a huge victory for Caesars because they missed the boat on Macau, which has risen to become the world’s premier gambling destination. However, they’ll now be able to put a stake in a wealthy nation of 50 million people that’s a short flight from both China and Japan.