Inside Asian Gaming

INSIDE ASIAN GAMING | April 2014 22 In Focus is anxious enough for foreign investment to be considering loosening its requirements. It may also shift to an open bidding process instead of requiring prior approval at the ministerial level. As the rules stand, though, LOCZ must invest $500 million over the next three and a half years, and the government is seeking legislative approval to bar the consortium from operating the casino until it invests a total of $700 million. In a research note, Morgan Stanley’s HyunTaek Lee and Praveen Choudhary noted, “This is a provisional license. The final license is scheduled to be issued in January 2018 only if LOCZ delivers what they promised to the Korea Government, including: 1) annual audit, 2) annual report on investment progress, and 3) invested money managed in single account.” Jeju Airest City Berjaya Jeju Resort is a sprawling complex of hotels, condominiums, retail space, a medical center and spa and sports and entertainment facilities. Morgan Stanley says it’s difficult to predict whether the new resort will increase the overall South Korean market or merely cannibalize it. “The market seems to take this as a positive,” the report noted, going by the immediate rise in the stock prices of the country’s two biggest foreigners-only casino operators, Paradise Group and Grand Korea Leisure, in the wake of the announcement. “The reasoning is that it could bolster Chinese gamblers’ growth, which would eventually spill over to Paradise and GKL. “However, the bears’argument is also valid in our view,”the report adds. “This is a new entrant, which should make competition fiercer. Although Incheon could benefit from this, existing sites located in other regions (like Seoul and Jeju) could take a hit.”