Inside Asian Gaming

inside asian gaming April 2015 31 concern, because the country’s foreigner-only casinos won’t enjoy their exclusive position in northeast Asia for long. Summit Ascent Holdings, aHong Kong-listed investment vehicle led by Macau casino billionaire Lawrence Ho, is scheduled to open a casino next month at a planned casino cluster on the outskirts of Vladivostok in Russia’s Far East, squarely within Korea’s catchment area. NagaCorp, operator of the NagaWorld casino resort in the Cambodian capital, Phnom Penh, plans to open another casino within that cluster next year. Importantly, Japan is also poised to enter the fray—although legalization of casinos there has been held up, there’s still a good chance it will happen this year. That could provide the necessary impetus for the Korean government to allow one or more additional casinos to serve domestic players. At present, Kangwon Land has the monopoly on locals play. Despite the property’s remote location—an arduous 3.5-hour drive from Seoul—its 200-table casino raked in a little more than the country’s entire foreigner-only sector last year, good for about $6.4 million per table. That yield might not hold up if glitzy new casinos open up in Osaka (1 hour and 40 minutes flying time from Incheon) or Tokyo (2 hours and 15 minutes). Kangwon Land’s performance at a severely capacity constrained venue points to considerable unserved domestic demand among the relatively affluent 50 million-strong population of the world’s 15th largest economy. It’s probably why many of the companies behind the integrated resorts currently under development or on the drawing board have left so much room to scale up their projects in subsequent phases. Any shift in policy to permit domestic players at casinos other than Kangwon Land would immediately boost the potential returns on larger resort investments. Kangwon Land’s performance at a severely capacity constrained venue points to considerable unserved domestic demand among the relatively affluent 50 million-strong population of the world’s 15th largest economy. second half of 2016. Having the 2018 Winter Olympics in nearby Pyeongchang will bring new roads that will shave an hour or more off the now-harrowing three-and- a-half-hour drive from Seoul as well as highlight the region’s recreational charms. But Kangwon remains all about gaming. Its casino revenue, which constitutes over 94% of total revenue, rose 11.1% year on year in 2014 to US$1.3 billion. South Korea’s pursuit of foreigner-only integrated resort development is not expected to impact Kangwon Land as a gaming destination. With up to four times more players than seats on weekends and a vibe at the tables that one player compared to a factory assembly line, bettors are there because they have no other choice. If Korea lifts its ban on local players at other casinos, however, then all bets are off. Although that’s not supposed to happen before 2025, and the government will be reluctant to jump the gun lest it be accused of dishonoring its commitment to Gangwon, if Japan were to legalize casinos and threaten to lure Korean players there, pressure could mount to move that day forward. To create a complete resort destination, Kangwon has added a convention hotel and attractions such as a ski resort, golf course and vacation homes under its High1 Resort brand. Cover Story