Inside Asian Gaming

INSIDE ASIAN GAMING | 24 bak lowered the up-front investment required of foreign entities interested in FEZ casinos from $300 million to $50 million and eased certain requirements on leverage and profitability. It was, in all, a modest reformation. But then, Korea has always been cautious in its approach to gaming expansion, and the new administration of President Park Geun-hye, which took office in February, isn’t sure it’s comfortable with even these alterations, and they’re said to be under review. Likewise, the government is anxious to quell speculation that the domestic market will be allowed to expand beyond Kangwon Land, the publicly owned casino that was summoned into existence a decade ago in the remote northeastern highlands to provide a lift for a down-at-the-heels former coal mining region. Though operated as a non-profit, Kangwon Land has proven so successful that it’s become something of a political headache. Despite its distance from Seoul (three to four hours by express President Park Geun-hye Jeju has appeared on a survey by China’s Global Times as one of the country’s three favorite resort islands along with Hawaii and the Maldives. economy. The casino market today consists of nine or so small venues serving the tourist trade in and around the capital, but the government is making tax breaks available and other benefits to attract investment on a resort scale, investment like Packer’s, and some of gaming’s other big names have been taking a look. Much has changed since the defeat in 2009 of a protracted armed uprising by the Hindu Tamil minority in the north of the island. By 2010, tourism receipts tripled to more than US$1 billion, according to a World Bank report, and the Sinhalese- Buddhist-dominated political leadership has wasted no time in directing attention to what is clearly a growth industry. In 2010, legislation was passed granting formal recognition to Colombo’s casinos, which up to that time had been referred to rather euphemistically as “recreation clubs” and were restricted (as they still are) bus) and limits on visitation (15 days per month) and daily wagers ($275), the casino is pulling in 10,000 customers a day, far more than it has actual room for, and the annual revenues from its 960 slots and 130 or so tables have tended to exceed those of all the tourist casinos combined. Down at the other end of the country on the self-governing island of Jeju in the Korea Strait, Malaysia’s Berjaya Group would love to include a casino for Koreans as part of its plans for a massive mixed-use residential, resort and health care complex. Berjaya, one of Asia’s largest companies whose holdings include land-based and online betting and lottery operations, is prepared to inject more money intoKoreantourismthananyforeigndeveloper ever, about US$2.5 billion, and things could be in play on Jeju given the island’s status as the country’s only “special autonomous province,” which affords it a great deal of independence from the central government in areas like foreign direct investment. Jeju used to be a popular destination for Japanese tourists, and it was an important stop for the Taiwanese before it became possible to fly direct from the ROC into mainland China. Japan’s gamblers have since migrated to the Philippines and to Grand Korea Leisure’s market-leading Seven Luck casinos in Seoul and Busan, and Jeju’s eight smallish venues, which include two Paradise casinos, have been left with not much of a growth story to tell. In light of which, it’s a wonder how the island found its way onto the radar screen of the likes of Berjaya. The answer to that is China. The number of visitors from the PRC A New Player SRI LANKA has grown from about 90,000 a decade ago to more than 1 million. Jeju has appeared on a survey by China’s Global Times as one of the country’s three favorite resort islands along withHawaii and theMaldives. Last year, China’s Travel Weekly named it its top honeymoon destination. In 2012, Jeju was selected for the first overseas investment by Greenland Group, Shanghai’s largest property developer. Last month, Landing Investment Group, a real estate giant based in China’s Anhui province, signed an agreement to develop resort facilities on Jeju to support an expansive “Myths and History” theme park which the local government is hot for. Another Malaysian entity, EMG Group, also is planning a large resort investment. J ames Packer has acquired land in the Sri Lankan capital of Colombo for what is reported to be a US$350 million casino, and the island suddenly is on the industry’s radar. It’s an interesting time for Sri Lanka, which is actively seeking developers to take its tourism industry to the next level and in the process grow the larger COVER STORY