Inside Asian Gaming

INSIDE ASIAN GAMING DECEMBER 2018 66 Yoo Tae-Yeol took over Grand Korea Leisure in June and has likely just formulated a strategic plan for his tenure. State-controlled, Korea-listed GKL and its Seven Luck casinos, two in Seoul and one in Busan, need a change. GKL has been losing ground to foreigner-only casino rival Paradise since the sector’s latest downturn began in early 2017 when THAAD missile defense system deployment cratered Chinese tourism. There are specific reasons for the widening gap this time. Bigger picture, Paradise has a growth catalyst – its new Paradise City integrated resort – and GKL, an arm of the government’s Korea Tourism Organization, doesn’t. Assessing GKL, Morgan Stanley Equity Analyst in Korea Jay Lee writes, “Casino sales rebound is less likely to be as strong as that of the competitor Paradise, given lack of capacity.” GKL has the best casino locations in Seoul and a focus on expanding premium mass business, but that’s not enough. GKL expressed interest in an Incheon IR license in 2015 but didn’t bid. Back then, GKL was linked to US tribal operator Mohegan Gaming, which won a license and is developing an IR across Incheon airport from Paradise City and, coincidentally, ditched its Korean partner in May. Perhaps there’s still a fit there for GKL. If not, there’s still another IR license available. It was 1975 when Hajimi Satomi founded Sammy Corporation and began his first venture selling pachislot machines. 43 years later he remains as ambitious as ever, positioning the company he now presides over to become one of Japan’s first IR operators. Sega Sammy Holdings was formed in 2004 after Sammy Corp purchased a controlling share in video game giant Sega. The resulting conglomerate’s business focus has since centered around four key segments – pachinko and pachislot sales, amusement center operations, arcade machines and video games. But with dark clouds hovering over Japan’s pachinko and pachislot industry, Satomi has steered the company in a new direction. In 2013, Sega Sammy teamed up with Korean foreigner- only casino operator Paradise Group to build Korea’s first integrated resort, Paradise City. The US$1.3 billion project opened for business in April last year with Sega Sammy holding a 45% stake. But Paradise City is only a warm-up vehicle for the company’s real goal – operating a casino at home in Japan. Hajimi Satomi CHAIRMAN AND GROUP CEO Sega Sammy Holdings POWER SCORE: 565 POSITION LAST YEAR: 49 CLAIMS TO FAME One of Japan’s biggest pachinko operators Partner in Korea’s first integrated resort 49 Sega Sammy has made no secret of this and even declared recently that it had dispatched 50 employees to Korea to learn the trade. Sega Sammy’s Chief Operating Officer Haruki Satomi, Hajimi’s son and heir, said the company’s Japan ambition is “to participate in all aspects of the integrated resort business, including casino operations” and that “we have been preparing steadily to realize this ambition.” ASIAN GAMING POWER 50 2 0 1 8