Inspire Korea Depresses Mohegan FY24 Operating Results, Loan Default Possible

Inspire Korea isn t off to the start Connecticut-based Mohegan had hoped.

, 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 has encountered higher-than-expected operating costs related to the resort s opening and operational build-up, which includes a costly marketing campaign across South Korea and Asian markets. The casino has also underperformed, with Glazer citing 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.

Mohegan achieved its highest 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.

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 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 at , a government-owned resort in a remote area of the Kangwon Province.