Company in growth mode
Philippine casino mogul Enrique Razon will buy an island in South Korea for the development of a resort complex expected to draw Chinese gamblers in search of entertainment beyond Macau.
“Silmi Island is intended to be developed into a leisure and tourism complex with entertainment facilities and mixed use developments,” the firm said. Its filing did not explicitly state that there would a casino on the island.
According to Bloomberg News, Razon’s company will buy the 21-hectare (52-acre) island through its subsidiary, Solaire Korea Co. In addition, in January the company signed four deals to acquire land on Muui Island, which is adjacent to Silmi Island.
Macau, the world’s leading casino destination, has been declared in recession amid a government crackdown on graft and money laundering at the city’s gaming halls. In 2014, the city’s casino revenue fell for the first time; it may decline another 8 percent this year, according to analysts surveyed by Bloomberg. As Macau sinks, other jurisdictions are expected to rise, with gaming revenue in South Korea and the Philippines projected to grow 16 percent and 33 percent respectively, according to Deutsche Bank analyst Karen Tang.
“We are excited at the prospect of Solaire setting up a base in Korea,” Razon said in a statement. “This is our first venture outside of the Philippines, and the possibilities for expansion in this country are promising.” He added that the company is “slightly shifting our focus to other destinations. … It is good business to start prospecting, and South Korea is a likely choice because of its positive investment climate.”
The transactions are still subject to South Korean government approvals, reported GGRAsia.
South Korea plans to approve two more foreigners-only casino licenses this year, with operators expected to invest at least KRW1 trillion (US$886.2 million) each. Authorities have already approved two casino projects for the Incheon Free Economic Zone. One is a partnership of South Korea’s Paradise Co. Ltd. and Japan’s Sega Sammy Holdings Inc. The other is a joint venture between Caesars Entertainment Corp. and Hong Kong-listed Lippo Ltd.
South Korea now has 16 casinos for foreigners-only and just one for locals.
