Inside Asian Gaming

JUly 2015 inside asian gaming 11 In Focus despite recent media warnings about the dangers of gambling in Korea, that Middle Eastern Respiratory Syndrome (MERS) will be a passing phenomenon as SARS proved to be for Hong Kong and Macau, and that visitors will be tempted to gamble more by better properties. Just last month, in the midst of MERS gloom, city officials in Incheon, about 40 minutes from the capital Seoul, announced plans to develop a resort with China’s Macrolink Group, a mining company diversified into sectors from real estate to wine. They enter a beehive of gaming interest and activity. South Korea already has 16 foreigners-only casinos, plus the remote Kangwon Land casino where Koreans may play that has greater revenue than all the foreigners-only casinos combined. The offer of two additional licenses reportedly drew nearly three dozen IR proposals for South Korea’s Ministry of Culture, Sports and Tourism to evaluate. Most proposals are for the Incheon Free Economic Zone (IFEZ) on Yeongjong Island, site of the nation’s gateway airport, that has been a magnet for IR interest. “Incheon is it for Korea,” Solaire Resort Korea Chairman and CEO David Shim says. Incheon International Airport, which handled 45 million passengers last year, is building a second terminal that will make it one of the biggest in the world, and has 100 million people within two hours’ flying time, including residents of Shanghai, Beijing, Tokyo and Osaka. Mr Shim points out that Seoul, Incheon and surroundings put Korea’s best 20 million consumers within an hour’s travel time of the zone, plus there are IFEZ benefits including tax exemptions and infrastructure support. And it looks likely there will be critical mass for Incheon as a gaming destination. Korea has already licensed two IRs in the IFEZ. Korean operator Paradise broke ground in November on its $1.2 billion IR next to its current casino at the airport’s Grand Hyatt hotel, a 15-minute walk or five minute shuttle bus ride from the terminal. The new project includes Japanese gaming machine manufacturer Sega Sammy and is expected to open in 2017. Caesars Entertainment, partnered with Indonesia’s Lippo Group, won approval last year for an IR in a different section of Yeongjong, expected to be open when South Korea hosts the 2018 Winter Olympics. GLOBAL INTEREST Likely bidders for the new licenses are an eclectic mix. Hong Kong’s Chow Tai Fook Enterprises, headed by long-time Macau casino investor Cheng Yu-tung, has proposed a $1.6 billion IR project at Incheon. Bloomberry Resorts, developer of Solaire Resort and Casino in Manila, submitted plans for a $3.4 billion resort ($1.4 billion first phase) on Muui and Silmi islands, part of the IFEZ that will be connected to Yeongjong via bridge by 2018. Mohegan Tribal For Chinese, South Korea isn’t just close but aspirational. There’s hallyu the Korean wave of pop culture that has captivated much of Asia, symptomatic of a highly developed consumer society. From cosmetics to cosmetic surgery to mobile computing power, South Korea beats what’s available in China.