South Korea has given a consortium of casino operators led by Caesars Entertainment (CZR) preliminary clearance to build a casino open only to foreign tourists. On the news, CZR stock climbed almost 4% in Tuesday morning trading.
Caesars and its partners are planning to build a $2.2 billion casino and resort on Yeongjong island. Caesars will reportedly hold a 40% stake in the new resort, with Singapore’s OUE Ltd. owning 40% and Hong Kong’s Lippo Ltd. holding the remaining 20%, Reuters notes.
While the preliminary approval is good news for Caesars, the South Korean government has not guaranteed that it will ultimately provide the consortium with a gaming license. The approval could also be withdrawn unless the consortium meets certain investment requirements.
The complex, which is expected to open in 2018, in time for the Winter Olympics in South Korea, will be Caesar’s first resort in Asia. Caesar’s does not have a strong presence in Macau, which is the world’s top gambling destination.
South Korean citizens are only permitted to gamble at one casino in the country. However, there are 16 casinos designated for foreign tourists in South Korea.
Caesars stock has gained more than 35% over the past year.
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