Inside Asian Gaming

INSIDE ASIAN GAMING | April 2014 20 In Focus Having casino resorts will initially bring explosive growth to Korea, too.” The market, consisting of 17 casinos, all but one of which are off-limits to Korean nationals, generated US$2.7 billion in gaming revenue last year, according to research house CIMB. It was slightly higher than the Philippines’ $2.6 billion but well behind Singapore’s $6.4 billion. In a recent report to investors, the Seoul office of UBS Securities said the government may select “three or four” foreign operators to joinCaesars at the special resort district thegovernment is sponsoring at Yeongjong, which lies about one hour’s drive from Seoul. One of them is expected to be South Korea’s Paradise Entertainment, the dominant operator in the foreigners-only market, which plans to develop a gaming resort of comparable size and cost in partnership with Japanese pachinko giant Sega Sammy Holdings. Two sizable projects also are moving forward down in the southwest in the Korea Strait, on the popular resort island of Jeju. Genting Singapore, which operates that city’s Resorts World Sentosa casino, is joining with Chinese property developer Landing Blue-Sky Scenario Genting Singapore announced its planned resort on South Korea’s Jeju Island in February. The 50-50 joint venture with an Anhui, China-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, 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 Genting’s planned Jeju resort will likely be more modest than reports suggest Sanbang-san Mountain on Jeju International Development on a casino with a hotel and supporting amenities on Jeju. The other development, dubbed Jeju Airest City Berjaya Jeju Resort, is a sprawling complex of condominiums, hotels, retail space, a medical center and spa and sports and entertainment facilities. The Ministry of Culture, Sport and Tourism is looking to the LOCZ project on Yeongjong Island to deliver more than 890 billion won in tourism income ($830 million) and 8,000 jobs in the construction phase. Their preliminary approval does not guarantee a gaming license, however. There are investment thresholds still to be met, and Caesars’ initial bid for a license was rejected last summer, reportedly because the government was concerned about the industry-high debt load the company has been carrying since its buyout by private equity interests in 2008. The government also nixed a bid by Japan’s Universal Entertainment, the gaming machine giant controlled by Kazuo Okada. Universal has not reapplied. News reports over the last several weeks suggest the government