Las Vegas gaming and hospitality powerhouse Caesars Entertainment Corp. is “currently evaluating” how much it should spend on its Caesars Korea integrated resort project, it became known during the company’s quarterly earnings call on Tuesday.
Caesars Chief Financial Officer Eric Hession was the company executive to comment on their plans for what would be their first Caesars-branded casino gaming resort in Asia.
Caesars reported a 2.3% increase in its third-quarter revenue to $2.24 billion and a 5.8% rise in non-GAAP adjusted EBITDA to $635 million.
Mr. Hession said that the group expects “approximately $275 million to $295 million for development-related capex” when commenting on their likely capital expenditure for 2019. Most of that money would be invested into the Caesars Forum conference center currently under construction in Las Vegas. The property is slated to officially open doors in 2020, adding 550,000 square feet of conference space amid growing demand for conference and convention facilities in Las Vegas.
The provided range also includes Caesars’ US sports betting expansion strategy, which involves opening sportsbooks with partners in states where athletic gambling is permitted. Mr. Hession also said that said range does not include their Korean project and that they are currently evaluating their investment into the scheme.
Caesars is currently in the middle of a $17.3 billion merger with smaller rival Eldorado Resorts. It will be namely Eldorado’s current management that will be leading the combined business. Eldorado’s CEO, Tom Reeg, said earlier this year that while “no firm decisions” were made regarding Caesars’ international investment, any opportunity for expansion beyond the US would have to be “stupendous for us to be running in that direction.”
The South Korea Project
Caesars has teamed up with Chinese real estate developer R&F Properties to jointly develop an integrated resort in Incheon near South Korea’s largest international airport. According to the project’s website, the property will occupy 172,249 square meters of land, which developers completed the payment for in mid-2018.
The Caesars Korea resort will blend classic and modern Greco-Roman architectural influences, which will make it an unmistakably Caesars property. The multi-purpose complex will feature a luxury hotel and serviced residences with more than 720 rooms, suites, and villas, a conference center with ballrooms and meeting rooms, live entertainment facilities, celebrity chef restaurants, bars, and lounges, high-end retail space, an outdoor amphitheater, and a number of other attractions.
Caesars Korea will also feature a casino that will admit only foreign patrons. Under Korean gambling law, only one gambling venue is permitted to admit nationals, even though the country is home to sprawling resorts with dedicated Las Vegas-style gaming floors.
As mentioned earlier, Caesars Korea would be the first Caesars-branded gaming resort in Asia. Last year, the company debuted the Caesars Palace Bluewaters Dubai and Caesars Bluewaters Dubai non-gambling resorts to set foot in Asia.
The company missed on the opportunity to win a Macau casino license back in the early 2000s when the government of the only Chinese territory where casino gambling is permitted issued a total of six licenses authorizing their holders to develop and operate casino properties.
Caesars was the only major Las Vegas operator not to win such a license, which significantly hampered its growth across the lucrative Asian market. Earlier this year, the company dropped its bid to enter Japan’s nascent gaming market. The move reflected Mr. Reeg’s words that after Eldorado’s takeover of Caesars, the combined entity would focus most of its attention on its domestic operations.
Caesars’ announcement that it would not pursue expansion in Japan prompted doubts over its future involvement in the South Korea integrated resort scheme.
Source: Caesars Ent evaluating South Korea scheme spend: CFO, GGRAsia
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