Inside Asian Gaming

INSIDE ASIAN GAMING | 22 M ore than 900,000 Chinese patronized South Korea’s foreigners-only casinos last year, a market comprised of 16 properties and worth in excess of KRW1.25 trillion in revenues (US$1.13 billion). South Korea is capturing about 5% of China’s overseas tourism currently and expects that to grow to 10% by 2020, which would be around 10 million consumers. Gaming is cranking along nicely at annual growth rates in the low double digits on the the country about 50 kilometers from Seoul. What the company and its partner, Japanese pachinko giant Sega-Sammy, have in mind for the first new casino to be licensed in South Korea in years will be five times bigger than Paradise’s flagship at the Sheraton Grande Walkerhill in Seoul. Plans call for a phased opening beginning in 2016 with 450 table games at full build-out— twice as many as Paradise operates now in all five of its casinos—and with non-gaming attractions that include two five-star hotels, a convention center, retail and an indoor theme park. The Incheon FEZ is one of six the government has launched to encourage domestic and foreign investors to think about Korea in a big way with substantial tax breaks, subsidies and other incentives. The gaming industry sees Incheon’s as themost promising because it’s home to the country’s principal airport and it’s the closest to China, about two hours by air from Beijing and an hour and a half or so from Shanghai. The largest operator in the United States, Las Vegas-based Caesars Entertainment, has its sights on Yeongjong and is seeking permission to develop a resort casino there in partnership with the Lippo Group, a conglomerate headquartered in Indonesia and listed in Hong Kong with holdings in retail, media, real estate, banking, natural resources, IT and health care. Tokyo- based Universal Entertainment, another major pachinko name and parent company of slot-maker Aruze, is reported to be in talks with Korea’s Shinsegae department store empire about a possible tie-up onYeongjong. Much has been written also about a longer- range development targeted for the Incheon FEZ called EIGHTCITY. Backers reportedly include Korea Airlines, Daewoo and luxury hotel group Kempinski and plans call for a EuroVegas-size cluster of hotels and other attractions. At least one casino figures in the plan, but there has been no word on whether a request has been filedwith the government. Actually, it isn’t known whether the government intends to license gaming at any of these projects aside from the Paradise joint venture. Last September, in the heat of the national elections, the administration of soon-to-be defeated President Lee Myung- COVER STORY Grand Korea Leisure’s Seven Luck Casino at Millennium Seoul Hilton Sheraton Grande Walkerhill in Seoul Berjaya Group’s vision for a massive mixed-use residential, resort and health care complex on Jeju. The Incheon Salient SOUTH KOREA strength of visitation from the PRC that has grown an average of 24% a year since 2009, very much in line with government’s vision of the country’s potential as a hub of the Asian travel and leisure boom. Paradise Group, which together with government-owned Grand Korea Leisure controls about 90% of the foreigners-only market, expects 4 million Chinese to be visiting Korean casinos by 2020 and is excited that it’s been chosen by the government to develop a US$600 million foreigners-only venue on Yeongjong Island in the Incheon Free Economic Zone in the northwest of