Inside Asian Gaming

inside asian gaming September 2014 62 In Focus music and soap operas across the continent, has sent the number of Chinese visiting South Korea to an all-time high of 4.3 million last year, up 52% from 2012 and accounting for 35.5% of the country’s inbound tourism, according to the Korean Tourism Organization. In the first half of this year, arrivals surged a further 53.8% to nearly 2.67 million, accounting for 40.3% of the country’s total tourists. If this trend continues, as many as 8.4 million Chinese will visit South Korea in 2018, predicts Martin Craigs, chief executive of the Pacific Asia Travel Association. “Korea is ideally located to benefit from structural growth in China’s outbound tourism,” says Tyler D.G. Ahn, analyst at Standard Chartered Securities Korea. Mr Ahn expects the number of Chinese VIP players coming to the country will rise at an average annual rate of 15% in the 2013-16 period, faster than the average pace of regional rivals. Mr Ahn and fellow Standard Chartered analyst Philip Tulk, based in Hong Kong, predict in a gaming sector report released in July that South Korea will become the second-best-performing gaming market in Asia in the next three years, ranking behind Macau but ahead of Singapore and the Philippines. The key rationale behind their forecast is gaming demand from northeastern China, including Beijing and Shanghai, an area they say is “underserved” by Macau, which caters mainly to gamblers from southern China. “Northeastern China accounts for 30% of the mainland China population but 50% of its high-net-worth individuals (assets of over US$1.5 million). This underserved gaming demand in northeastern China represents reserve head room for market growth of Korea operators,” the report states, adding South Korea is well-positioned to cater to this area because of its geographical proximity. The rising cost of gambling in Macau has also driven some Chinese players to look for other places to lay their bets. “Macau “Northeastern China accounts for 30% of the mainland China population but 50% of its high-net-worth individuals. This underserved gaming demand in northeastern China represents reserve head room for market growth of Korea operators.” Standard Chartered analysts Tyler D.G. Ahn and Philip Tulk