Korea’s Lotte Tour Development Co (LTDC) will likely transfer its newly acquired casino license from Paradise Jeju Lotte Casino to its US$600 million Jeju Dream Tower upon completion in 2019, according to Union Gaming analyst Grant Govertsen.
Discussing LTDC’s US$39 million purchase of Paradise Jeju Lotte Casino from Paradise Co late last week, Govertsen said it was almost certainly conducted under the same pretenses as Landing International Development Limited’s acquisition of the casino at Jeju Hyatt in 2017, which it promptly transferred to its recently opened IR, Jeju Shinhwa World.
Jeju Dream Tower is set to become Jeju’s second integrated resort.
“Landing eventually transferred its license to … Jeju Shinhwa World,” Govertsen said. “We expect LTDC to do the same and ultimately transfer this license to Dream Tower when it opens in late 2019.”
Govertsen also noted that LTDC acquired Paradise Jeju Lotte Casino for around half to one-third the cost of other recent acquisitions, including Landing’s, due to the recent downturn in Korean GGR on the back of reduced Chinese visitation.
However, he suggested that the timing could prove astute.
“Following a challenging 2017, the Korean foreigners-only market is trending up on a year-to-date basis,” he said.
“Paradise Co, which is selling one of its five casinos to LTDC, has noted that through the first six months of 2018, gaming volumes are up 18%. As Paradise is the bellwether, we would expect the entire market is broadly in line with Paradise.
“Separately, Landing International, which opened Jeju Shinhwa World on 25 February, issued a positive profit alert to the Hong Kong exchange on Friday, noting an approximately 500% increase in net profit driven by ‘the increased revenue contributed from gaming business in Jeju, South Korea’.”
Jeju Dream Tower will stand 169 meters tall and boast 1,600 all-suite rooms across two towers, while the casino will have space for up to 200 gaming tables and 400 slot machines.
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