Inside Asian Gaming

INSIDE ASIAN GAMING | November 2010 6 out in the wilds of Gangwon-do province in the northeast of the country, generated gross revenue of KRW1.2 trillion (US$1 billion) all by itself. In the absence of an opening up of the domestic market, one way to drive further growth of the foreigners’ casino venues might be via travel packages linked to the Meetings, Incentives, Conventions and Exhibitions market. South Korea has many virtues, but being a natural holiday destination for foreigners isn’t one of them. It’s expensive, plus it’s freezing in the winter and oppressively humid in the summer. Unless Korea’s casino market is further opened up to locals, then it could lose a significant part of its income in a matter of a few years if Japan ever gets round to legalising casinos. Kangwon Land’s performance is proof of the latent demand for casino gaming from the natives. Sources inside the country inform IAG that the casino is so popular among South Koreans that hard-up pensioners with time on their hands arrive M acau and Singapore’s casino industries naturally attract the most attention from analysts and gaming journalists because of the scale of the investments made in them and the potential returns to be had on those investments. There is, however, another market that doesn’t get as much coverage but that could be a sleeping giant. It’s South Korea. Unlike much-hyped Japan, South Korea actually has casinos. Indeed, the country was a trailblazer in the regional history of casino liberalisation. The first one opened in Incheon—South Korea’s third-largest city in the northwest of the country—in 1965. That was only three years after Stanley Ho’s monopoly began in Macau. After Incheon came Sheraton Walker hill in Seoul, in 1968. Then there was a 13-year hiatus until Paradise Casino—located at Haeundae Beach at the port city of Busan in the south of the country—opened in 1981. Since then, the market has expanded to 17 casinos, 16 of them for foreigners only—mainly junket players from Japan and China, complemented by a sprinkling of Koreans who have access to a foreign passport. According to a paper from Singapore-based DBS Vickers Research published in February, sales for the foreigners-only casinos grew fivefold between 2000 and 2010, hitting 1 trillion won (US$895 million). That’s impressive, but imagine how much more the Korean industry could be realising if the market were opened up fully to locals. In 2009, the locals’casino, Kangwon Land early at Kangwon Land to occupy seats at the crowded tables, and then charge eager gamblers arriving later up to US$700 for those seats on the weekend. Expansion scheme Kangwon Land has plans to expand by 2012. But there are political sensitivities domestically around any such expansion. In October last year, the Korea Times reported that from the time Kangwon Land opened in 2000, it had faced 23 lawsuits from Korean nationals claiming rebates on combined losses of KRW53.8 billion (US$50 million). In particular, The average Korean in the street—still to be persuaded on further casino liberalisation? Market Outlook Wakey Wakey There’s more to Asian casino gaming than just Macau and Singapore. Could South Korea, the sleeping giant of the Asian casino industry, be about to get an alarm call? Fat of the land—Kangwon Land is a big hit with Koreans