Inside Asian Gaming

inside asian gaming September 2015 50 Apart from Paradise Group, which has been running foreigners- only casinos in South Korea since the 1960s, the other big operator in the market, Grand Korea Leisure, is a relative upstart. Together, Paradise and GKL generate up to 90% of foreigners-only revenue—a share that Paradise had controlled by itself prior to GKL’s establishment in 2005. GKL was set up as a subsidiary of the Korea National Tourism Organization, with the objectives of promoting tourism, raising money to fund tourism projects and helping to reform the Korean image of gaming as a social evil. It opened three casinos—two in Seoul and one in the port city of Busan—under its Seven Luck brand in 2006, and by 2010 had grabbed an estimated 54% of the foreigners-only market, though Paradise soon reclaimed the lead as GKL slipped firmly into second place. The three-month outbreak of Middle East Respiratory Syndrome in South Korea beginning 20th May derailed a strong run of growth for the country’s foreigners-only casino operators. Although GKL’s casino revenue was up 4.9% year on year in the second quarter to KW122.4 billion ($103 million), it was down 18% over the first quarter. The South Korean government proclaimed an end to the outbreak LimByoung-soo President and Chief Executive Grand Korea Leisure last month, giving rise to hopes of a resumption of the tourism industry’s recent boom, driven in particular by surging Chinese visitor numbers. GKL’s share of the foreigners-only market in the second quarter stood at 37.2% compared to Paradise’s 47.4%. The gap is likely to widen when Paradise launches Korea’s first integrated resort, slated to open near Incheon in early 2017. Lim Byoung-soo, in his second year at the company’s helm, is trying to counter that by expanding Seven Luck’s Seoul Gangnam branch within the next year or so. GKL is also pursuing approval to operate casino cruises and has put together a proposal to develop an integrated resort of its own. The government last month announced the commencement of the process to accept formal proposals for two additional foreigners- only integrated resort projects, after the concept phase drew 34 applicants, including GKL. Failure to get approval for its IR project would consign GKL to a perennial runner-up position in the market. And even if it does manage to get approval—the government has said it will likely be December before it announces the two winning bids—it’ll still have a lot of catching up to do. The leadership of Winfried Engelbrecht-Bresges is transforming the experience for fans of the Hong Kong Jockey Club and paying sizable benefits to the city’s people. Since taking the helm as chief executive in 2007, the one- time professional footballer has re-energized the fortunes of the venerable HKJC and its two famed courses, elevating the quality of the competition and spearheading a reinvestment strategy that has seen the club spend upwards of HK$3 billion to upgrade its facilities and direct its focus toward the pursuit of the sport’s aficionados of tomorrow by diversifying the entertainment offering with new restaurants, live music, themed party nights and wine-tastings. Last Winfried Engelbrecht-Bresges Chief Executive Officer Hong Kong Jockey Club year, the club added a betting venue in Beijing to generate more revenue from mainland Chinese and has launched co-mingled wagering with tracks in the United States, solidifying the status of Hong Kong pools as the largest in the world. “Since the 2005-2006 season, turnover has increased 79.7%, which is testament to the successful strategies the club has undertaken in that time to revitalize Hong Kong horseracing,” he noted in a July press conference to announce the results of the 2014- 15 season. Speaking of that season, when the last horse crossed the finish line on 12th July, betting and attendance year on year were up 5.8% and 2.6%, respectively. More than 2 million people had turned out for the 83 meets at Sha Tin and Happy Valley, the most in 12 years. Their wagering totaled HK$107.9 billion, setting a new record for the third consecutive season. The performance generated $12 billion in taxes for the government of Hong Kong and lifted the club’s donations to city charities to $3.87 billion, also a record. But to get a real idea of the impact that Mr Engelbrecht-Bresges’ leadership has had on Hong Kong, when betting and lottery duties, profits tax, contributions to the Lotteries Fund and charitable