Inside Asian Gaming

October 2013 | INSIDE ASIAN GAMING 29 the biggest share. GKL was set up by the government in 2005, through the Korea National Tourism Organisation, to boost tourism and generate income to fund tourisminfrastructureandothergovernment projects. Two of its properties are located in Seoul, one in Busan. In November 2009, GKL floated 30% of its equity on the Seoul Stock Exchange, and there has been talk of more stock being sold to private investors, but the company is still majority-owned by the government. GKL and Paradise Group together command around 93% of foreigners-only casino revenues. A big factor in Paradise’s favor in its market share tussle with GKL is that it is relatively more reliant on Chinese visitors, whose numbers are showing the strongest growth of all inbound markets. (South Korea is the thirdmost popular destination, behind Hong Kong and Macau, for outbound Chinese travelers.) GKL is dependent more on Japanese patrons. While the total number of all inbound travelers to South Korea was up 6% year on year over the first seven months of this year, the number of Chinese visitors surged 52% and the number of Japanese posted a 27% decline. As recently as last year, Japanese comprised the biggest group of inbound visitors to the country, but the most recent figures show Chinese visitors making up 34% of the total while Japanese constituted only 23%. The growth in Chinese visitation is expected to get an added boost from the South Korean government’s announcement in July of a further easing in visa rules for visitors fromChina and Southeast Asian countries. While the majority of Chinese visitors to the country are headed for Seoul, Jeju Island has emerged as a major hotspot. Since 2008, the island has offered visa-free entry to Chinese nationals and all foreigners for a stay up to 30 days, whereas Chinese need to obtain visas in advance to land in other parts of the country. Furthermore, all foreigners arriving in Jeju are able to travel on and stay elsewhere in South Korea for up to 72 hours, leading to a growing number of Chinese tourists stopping in Jeju in order to travel to other parts of the country without a visa. Jeju also made amendments on permanent residency regulations in May 2011 allowing foreigners to receive a green card if they purchase over US$500,000 worth of resort facilities in Jeju. As a result, there has been a boom in property purchases by Chinese citizens on the island. A Goldman Sachs report released last month noted: “The pace of growth in number of visitors and gaming revenues of casinos in Jeju is 3 to 4 times higher than what we see for overall foreigner-only casinos in Korea. While the total number of visitors to casinos in Korea increased to 2.4 million persons in 2012, up by 13% year on year, visitors to casinos in Jeju increased to 227,000, up 45% year on year. Gaming revenues are also rising at a fast pace in Jeju with aggregate sales of 8 Jeju casinos increasing by 55% vs. 11% year on year for total gaming revenues of foreigner-only casinos in Korea for 2012.” Breakdown of Foreign Visitors to Korea by Nationality Source: Korea TourismOrganization Key places Chinese/Japanese tourists visit within Korea Source: Korea TourismOrganization IN FOCUS