Inside Asian Gaming

FEBRUARY 2016 inside asian gaming 21 In Focus in a remote, run-down inland mining area. Foreigners, predominantly Chinese and Japanese, flock to these gambling halls, which are typically on a scale of around 40 tables. Aside from paying much- needed taxes many argue they do little for the Korean economy. A typical integrated resort, by contrast, involves a massive investment of at least a billion US dollars. With leisure facilities galore backed up up by a thousand-plus hotel rooms, it should accommodate over a million visitors each year, employing thousands of locals and boosting tourism nationally. Tourism from China was burgeoning when Korea gave the go-ahead for its first IR in 2013. It’s a US$1.7 billion joint venture between the largest domestic casino operator Paradise Group and Japanese gaming company Sega Sammy, slated to open next year. Construction on a second started soon after; a tie up between Indonesia’s Lippo conglomerate and Las Vegas’ Caesars Entertainment that should start operations in 2018. It is projected to cost US$1.9 billion. Both are now under construction on Yeongjong island, a free-trade zone in Incheon City some 50 kilometers west of Seoul, that houses the country’s main airport and aims to become a mini-Macau. National gambling revenue had seen nine straight years of growth when MCST issued the request for concepts for two more IRs in February last year. The surge in visitor numbers to Korea from the main target market China was continuing, shooting up 42% to 6.1 million in 2014 alone. MCST’s requirements for bidders were relatively strict. An investment of at least 1 trillion won (about US$850 million) was specified, to build more than 1,000 five-star hotel rooms, conference facilities, 20,000 square meters of retail space and amenities for leisure and culture, including a “themed attraction” costing at least US$60 million. Gambling could take up no more than 5% of the resort’s total floor space. As before, the casino would be off-limits to Koreans. In spite of these demands, by the June 30 deadline 34 parties had submitted a plan. Among them were Macau’s Melco Crown, which proposed to build its IR at the Incheon cruise terminal on the Korean mainland a few kilometers across from Yeongjong, and the Philippines’ Bloomberry Resorts. Bloomberry’s concept was among the most publicized. The operator of the Solaire Resort and Casino in Manila proposed a project spanning a pair of smaller islands; Muui and Silmi just off Yeongjong’s southwestern corner. Twice-daily tide changes making it possible to walk across the sea channel separating the two would provide a unique attraction. On top of this natural marvel, Bloomberry’s IR would feature an all-weather waterpark, weddings by New York designer Vera Wang and a Tommy Hilfiger/Karl Lagerfeld center to foster new talent in fashion, art and entertainment. Copying Steve Wynn’s Treasure Island show in from 1990s Las Vegas, there would even be an amphitheater staging recreations of historic Korean naval battles. On top of five locations on Yeongjong island and one at the nearby Incheon cruise terminal, MCST was offering bidders three other sites for development. Jeju Island might have seemed a natural choice. Located off South Korea’s south coast it is already Korea’s number two tourist destination with eight operating licensed casinos; the largest concentration in the country. Yet Korea’s political structure gives Jeju autonomy to grant its own casino licenses, so it was not included in the national IR proposal process. Outside Yeongjong and the Incheon cruise terminal, therefore, the three other locations were Korea’s second largest city Busan, which already has two casinos, MCST’s requirements for bidders were relatively strict. An investment of at least 1 trillion won (about US$850 million) was specified, to build more than 1,000 five-star hotel rooms, conference facilities, 20,000 square meters of retail space and amenities for leisure and culture, including a “themed attraction” costing at least US$60 million. Gambling could take up no more than 5% of the resort’s total floor space. As before, the casino would be off- limits to Koreans.