Unlock the Editor\u2019s Digest for free<\/p>\n
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n
One of the world\u2019s largest private equity groups is embroiled in an unusual tug of war with a Native American tribe over the future of a sprawling casino complex in Asia.<\/p>\n
The Inspire Resort, with three five-star hotels, a 15,000-seat K-pop arena and a foreigners-only casino, had its grand opening in 2024 by the Mohegan tribe. The development on an island near South Korea\u2019s Incheon international airport was the first outside North America for the tribe, which has a 600-acre reservation in Connecticut.<\/p>\n
But in February Bain Capital, which provided $275mn of financing for the project, called the loan two years early and took control of the project after Mohegan failed to hit covenants related to growth targets.<\/p>\n
The decision shut Mohegan out of a project it had been developing for almost a decade, and led to Bain taking ownership of a foreign casino and gaming licence complete with billions of dollars in refinancing and investment obligations.<\/p>\n
Now Bain is back in talks with Mohegan over a possible return to the $1.6bn project, according to the new leadership of the tribe, which wants to continue to play a role in its flagship overseas venture.<\/p>\n
\u201cMohegan has put a lot of effort, time and commitment into this project going back 10 years, so we obviously have a keen interest in seeing it through,\u201d said Bobby Soper, Mohegan\u2019s international president.<\/p>\n
\u201cWe have had continued discussions with Bain, and I think they understand our position in that regard,\u201d he added. \u201cIt\u2019s our hope that we\u2019ll have a resolution that achieves our goals and makes both parties happy, but not at any price and it has to make sense.\u201d<\/p>\n
People familiar with Bain confirmed that it was talking to Mohegan over a possible return to the project, after taking over running the resort itself while exploring bringing on operating partners over the past few months. <\/p>\n
In a statement the private equity firm said: \u201cBain Capital and Inspire\u2019s management team have worked closely to strengthen operations and enhance the overall guest experience. We remain focused on the resort\u2019s long-term success and continue to have a strong relationship with all stakeholders.\u201d<\/p>\n
Only one South Korean casino is open to domestic customers and so the sector relies almost entirely on foreign tourists, especially from China. <\/p>\n
Although the country\u2019s casino revenues are still a fraction of those generated in the Chinese territory of Macau, industry executives expect booming demand this year. Growing China-Japan tension could drive more Chinese tourists to South Korea instead, while Seoul has also recently restored a visa-free travel policy for Chinese group tourists. <\/p>\n
The Inspire Resort in Incheon competes with domestic rivals such as Paradise, GKL and Lotte Tour.<\/p>\n
The resort initially appeared a success following its soft opening in November 2023, helping Mohegan Gaming to achieve record revenues for the second quarter of 2024.<\/p>\n
But its performance deteriorated by early 2025 as it struggled to attract and retain return visitors.<\/p>\n