Inside Asian Gaming

FEBRUARY 2016 inside asian gaming 23 potential partners. Three of them were mid-tier Korean construction companies or resort operators – Ocean View, Booyoung World and Yeosoo Kyungdo – with no track record of big projects. The other was Global Gaming Asset Management (GGAM), a US firm headed by William Weidner, who used to be president and COO of Las Vegas Sands but no longer has the wherewithal of the global gaming giant behind him. For more qualified candidates, the main reason for pulling out was undoubtedly given by GKL which cited “shrunken demand” from China when announcing its withdrawal. Last year the mainland’s souring economy, together with president Xi Jinping’s crusade against corruption, sent revenues plummeting in Asia’s gaming capital Macau and spread chills across the wider region. “The profitability of new casinos will be low, especially if they have to invest so much in non-gaming attractions,” says Yang Il-woo, an analyst at Samsung Securities. Last summer’s Shanghai stock market crash heralded the downturn in China. At the same time, the Middle East Respiratory Syndrome (MERS) virus hit Korea causing 186 to fall sick and killing 36. That was one reason visitor arrivals in the country fell by 40% year-on-year, in the months of May, June and July. And on top of MERS, police in China started cracking down on Korean casinos’ marketing operations. In June, officers arrested 13 Paradise and GKL employees who had been organizing golf events in China, along with other marketing activities. Korean casinos run their own direct marketing activities. That contrasts with other Asian casinos that depend on junket operators for Chinese VIP customers. Junkets have very strong networks In Focus in China, which enables them to neatly tiptoe around local laws prohibiting the soliciting of people to go abroad and gamble. “GKL is state-owned, so the arrest of its marketers in China created a political problem,” says Yang Il-woo. It’s not hard to see why a Chinese developer like Macrolink would get cold feet about building a Korean casino under such a change of Concept rendition of Mohegan Sun’s “Inspire” integrated with Incheon International Airport.