Caesars Entertainment has won preliminary approval from the South Korean government to build a $794.7 million hotel-casino complex near the country’s largest airport outside of Seoul.
The ruling does not guarantee that the joint venture between Caesars, Hong Kong-based real estate developer Lippo Group and a Korean developer will receive a gaming license. The developers still have to meet certain investment conditions.
The project, which would be South Korea’s largest casino and the first licensed to foreign investors, received preliminary approval late Monday from the South Korean Ministry of Culture, Sport and Tourism.
The complex, which will include three hotel towers with 760 rooms and suites, would be located on Yeongjong Island, about six miles from the Incheon International Airport and 25 miles from Seoul.
The casino would cater to only foreign visitors and not residents of South Korea. The country has 16 foreigner-only casinos whose primary customers comes from China and Japan.
In a filing Tuesday with the U.S. Securities and Exchange Commission, Caesars said definitive agreements among the joint venture parties still need to be negotiated and third-party financing needs to be secured.
“We are grateful to the Korean government for their initial approval, paving the way for the opportunity to build and operate our first integrated resort in Korea,” Caesars Chairman Gary Loveman said in a statement.
Caesars said the joint venture group hopes to open the Incheon resort in time to attract visitors attending the 2018 Winter Olympics in Pyeongchang, South Korea.
According to Bloomberg News, the South Korean government wants to draw 10 million Chinese visitors a year by 2020. That compares with 4.3 million last year, an increase of 53 percent from 2012, according to data from the Korea Tourism Organization. Chinese visitors made up 36 percent of foreign visitors to South Korea in 2013, and accounted for 41 percent of visits to the country’s casinos in 2012, according to the latest official data.
Caesars Entertainment is the largest Nevada casino company without a presence in Macau, which produced a record $45.2 billion in gaming revenue in 2013.
“We are excited about the opportunity to expand our network and brands to Asia,” Loveman said. “Foreign visitation to South Korea has grown significantly, and we look forward to creating a world-class destination to further support Korea’s economic growth and tourism goals.”
In addition to the hotel, the complex would include resort amenities, live entertainment venues, retail attractions, a stand-alone convention center and the casino. The preliminary master plan allows for future expansion to accommodate increased visitation.
In the SEC filing, Caesars said the project would create “thousands of jobs” during a four-year development and construction period, as well as 3,500 permanent jobs.
Caesars said the company’s affiliate, Caesars Growth Partners, may be included in the development of the project.
Shares of Caesars Entertainment, traded on the Nasdaq Global Select, closed at $24.87 Tuesday, up 96 cents or 4.02 percent.
Last month, Malaysia-based Genting Group announced plans to build Resorts World Jeju, a $2.2 billion casino resort complex on Jeju Island, which is already popular with wealthy Chinese tourists.
In a report to investors last week, a South Korea-based analyst for UBS Securities said the government may select “three or four” foreign gaming companies to bid resort complex for country.
Other names mentioned included Wynn Resorts Ltd., Las Vegas Sands Corp. and MGM Resorts International.
“As mentioned, the government plans to select international operators via open bidding,” UBS analysts wrote. “The timing is uncertain as policymakers need to build consensus before they outline details of the concessions.”
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871. Follow @howardstutz on Twitter.