Inside Asian Gaming

inside asian gaming April 2015 24 Cover Story Meanwhile, the government plans to speed the process along by revising investment limits to allow major Korean corporations to participate in the integrated resort industry. Existing rules stipulate that foreign investors must hold at least 51% of such projects before local players can join in. “Now, anybody, including large companies such as Samsung and Hyundai, can participate in the projects through fair competition,” a government official explained. Another locus of development could be the popular resort island of Jeju, which sits just below the Korean peninsula’s southwestern tip. In February, Genting Singapore, operator of Resorts World Sentosa in Singapore, along with its JV partner A second project already approved on Yeongjong is a joint venture led by US casino operator Caesars Entertainment, which plans to break ground this year ahead of a planned opening in 2018. Two other ventures could join the cluster come 2019. Playing Catch-Up Apart from Paradise Group, which has been running foreigner-only casinos in Korea since the 1960s, the other big operator in the market is a relative upstart, Grand Korea Leisure. Together, Paradise and GKL generate about 90% of foreigner-only revenue—a share that Paradise had controlled by itself prior to GKL’s establishment in 2005. GKL was set up as a subsidiary of the Korea National Tourism Organization, with the objectives of promoting tourism, raising money to fund tourism projects and helping to reform the Korean image of gaming as a social evil. It opened three casinos—two in Seoul and one in the port city of Busan—under its Seven Luck brand in 2006, and by 2010 had grabbed an estimated 54% of the foreigner- only market, though Paradise soon reclaimed the lead as GKL slipped firmly into second place. In recently quarters, GKL’s share has bobbed in percentage terms in the mid-30s to low-40s range, compared to Paradise’s mid-40s to low-50s. The gap is likely to widen when Paradise launches Korea’s first integrated resort, slated to open near Incheon in early 2017. GKL hopes to counter that by expanding its Seoul Gangnam branch within the next year or so. Management is also pursuing approval to operate casino cruises and has put together a proposal to develop an integrated resort of its own, with Jeju and Busan tipped as possible locations. Failure to get approval for its IR project would consign GKL to a perennial runner-up position in the market. Even if it does get approval soon, it’ll have a lot of catching up to do. Paradise Leads the Foreigner-Only Market Note: Figures are rounded to nearest unit, thus they may not add exactly to the round total Source: Korean Casino Association 400 350 300 250 200 150 100 50 0 4Q13 1Q14 2Q14 3Q14 4Q14 (KRW bn) Paradise 177 bn Paradise (Walker-hill) Paradise (Jeju Grand) Paradise (Incheon) Paradise (Busan) Paradise (Jeju Lotte) GKL Others 112 110 107 95 104 13 13 15 19 15 28 28 27 25 29 18 17 20 23 20 12 3 11 14 8 133 136 114 134 150 35 27 35 46 30 344 335 328 357 358