Genting Singapore plans to build a resort casino on South Korea’s Jeju Island.
The 50-50 joint venture with an Anhui-based, Hong Kong-listed property company called Landing International Development will target visitors from China, the feeder market for what is growing into the island’s largest contingent of foreign tourists.
“Eastern and Northern China is very close to Jeju Island, and it’s roughly about a one-hour flight, which makes so much more sense for people in Beijing, Shanghai or Qingdao to come to Jeju Island than going to Macau,” said Landing International Chairman Yang Zhi Hui.
About 4.3 million Chinese tourists visited South Korea in 2013, an increase of 53% over the year before, and they now account for one-third of the country’s total, according to the Korea Tourism Organization.
Bloomberg reports that plans for the 2.3 million square meters the partnership has obtained call for a phased development that ultimately will include a theme park, a shopping mall, luxury residences and three hotels totaling 2,800 rooms. The casino, restricted by Korean law to foreign passport holders, will contain 800 table games, 200 of them VIP, at full build-out.
Total cost is pegged at US$2.2 billion, but Macau-based Union Gaming Research Macau dismissed that as a “blue-sky scenario” in a recent note to investors in which it estimates an initial outlay by Genting of about $153 million as part of a two-phased development in which the company’s commitment will increase to $250 million in line with a Korean investment requirement of $500 million to qualify for licensing.
“We find it unlikely—given Jeju gaming dynamics—that Genting’s Jeju IR will exceed the investment threshold,” the firm said. “In our view, in order to justify a USD2.2bn investment in South Korea, 1) the government would have to allow locals to gamble, and more importantly, 2) the IR would need to be located in a major metropolitan area like Seoul, rather than an offshore island like Jeju that doesn’t have the benefit of a massive local population base.”
UGRM believes the gaming portion could feature up to 100 tables and the hotel “a few hundred” rooms and projects a 2017 opening for the first phase, with the second coming on line in 2019.
Publicly traded Genting Singapore is majority owned by Malaysian resort conglomerate Genting Bhd, whose extensive gaming holdings through various subsidiaries include Resorts World Sentosa in Singapore; the company’s Malaysian flagship, Resorts World Genting at the mountaintop Genting Highlands holiday complex north of Kuala Lumpur; a beachfront casino and hotel in Bimini in the Bahamas; Resorts World New York City at Aqueduct racetrack in Queens, N.Y., the top-grossing machine gambling operation in the United States; and Resorts World Manila, the revenue leader in the Philippines market, where the company is developing a second Manila megaresort in partnership with local property giant Alliance Global.
Aggressive expansion plans include destination casinos in Miami and on the Las Vegas Strip and a non-gaming hotel in Macau. Japan also is in the company’s sights.
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