The government of South Korea has denied the casino license applications of Caesars Entertainment and its partner Lippo Group and Kazuo Okada’s Universal Entertainment.
The Ministry of Culture, Sports and Tourism gave no reasons for the decisions, according to a Reuters report, but a government official with knowledge of the matter told the news agency the decision reflected concerns about Las Vegas-based Caesars’ credit rating. Moody’s Investors Service lowered its ratings on the company and assigned a negative outlook in April, citing adverse gaming revenue trends. Lippo, an Indonesian conglomerate, has holdings across East Asia in retail, banking and finance, media, real estate, hospitality, energy, IT and health care.
The consortium said it was “surprised and disappointed” and believed it had met the license requirements.
The partnership had applied in January for permission to develop a mixed-use resort with gaming in an area designated by the government for development near the international airport in Incheon, not far from the capital of Seoul. Six of these so-called “free economic zones” have been set up around the country to spur domestic and foreign direct investment via tax breaks and other benefits.
Foreign tourism is seen by South Korea as a growth industry with special promise, and officials appear to want to encourage its development. The Incheon FEZ is considered a key to this effort because of its proximity to China. The government has approved one resort casino for Incheon to date, a joint venture between Paradise Group, one of the country’s leading operators of foreigners-only casinos, and Japanese pachinko giant Sega-Sammy.
Universal, a machine gaming giant with subsidiaries worldwide and casino plans in the Philippines, was not immediately available for comment.
The company’s Philippines ambitions, centered on development of a multibillion-dollar resort in Manila, have stalled over bribery allegations that are under investigation by the country’s National Bureau of Investigation and the US Justice Department.
Mr Okada was ousted as a director and major shareholder of Wynn Resorts after an in-house investigation found what it considered evidence of wrongdoing related to the Manila development. Universal and Mr Okada are challenging those findings in a lawsuit in the United States. The company also strenuously denies the bribery allegations.
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