Only two companies have paid initial fee
Back in the spring of 2015, almost three dozen gaming operators were expected to bid on two gaming licenses offered by the government of South Korea. But by the end of the year, the field included just six contenders, and only two of those have deposited the $50 million upfront fee: Imperial Pacific, which holds a gaming license in Saipan; and a partnership led by U.S. tribal gaming operator Mohegan Sun, which plans a lavish integrated resort near Incheon International Airport.
In a December report, Forbes magazine said, “For South Korea, it’s been a swift descent from ‘hot’ to ‘not’ on the regional gaming hit parade. There is a distinct likelihood that no new casinos will win approval.”
Most recently, a proposed $2 billion gaming project from developer Lippo Ltd. and Caesars Entertainment came into question. According to the World Casino Directory, the joint venture, approved by the government in 2014, may not go forward due to Caesars’ precarious financial footing and a possible looming bankruptcy for the parent corporation. In a filing to the Hong Kong Stock Exchange, Lippo said the future of the project is questionable due to “a number of uncertainties.” Lippo and Caesars planned a casino with hotels, shopping malls, convention centers and residential buildings.
Late last year, Grand Korea Leisure and NagaCorp announced they would not apply for licenses on Yeongjong Island off Incheon; they said the crackdown on Chinese VIP gamblers could make the planned integrated resort unsustainable. A Grand Korea official cited “the shrunken demand from Chinese customers” as one reason for the firm’s withdrawal. Though Chinese tourists comprise the largest visitor group to Korea—44 percent of arrivals in November were incoming from the Chinese Mainland—gaming revenue has not kept pace with visitation, Daemin Consulting Director Tim Lee told Forbes. He added that the South Korean government would do well to consider throwing open the doors to locals, who presently are barred from playing in all but one remotely located casino.
Lee also cited the recent opening of Lawrence Ho’s Tigre de Cristal in Vladivostok, which will be a direct competitor with Korea for the northern China and Japan markets. That resort is open to Korean players.
Union Gaming agrees barring local players could also jeopardize the long-term viability of the Korean industry, saying there are “serious questions on the future of Chinese-originated VIP play.”
Korean casino operator Paradise and Japanese gaming manufacturer Sega Sammy are developing a resort next to the Paradise casino at the Grand Hyatt hotel near the airport. It is expected to open by early 2018. The December 19 grand opening of Bloomberry Resorts’ Jeju Sun Casino could be the last major development for some time. The resort has just 42 tables, 21 slot machines and 202 hotel rooms.
