South Korea may limit junket operators
Jeju island in South Korea is launching a study of its gaming industry with an eye toward boosting the sector and increasing the government’s share of casino taxes, according to a report on Korea Bizwire. It’s not known if Jeju plans to institute an outright tax increase, or if it even has the power to do so.
Currently, there is an effective rate of 20 percent on gaming revenues at the island’s eight foreigners-only casinos. Last October, Governor Won Hee-ryong said he favored an overhaul of the gaming tax laws.
GGRAsia reported that officials will “compare and analyze” the tax rate of casinos in other jurisdictions as part of the study, which is expected to be complete in July.
The vacation destination is a favorite of Mainland Chinese tourists and offers them visa-free entry under certain conditions. But Jeju’s popularity among Chinese tourists has caught the eye of the central government, which is cracking down on the gaming industry in Macau and has warned other jurisdictions not to shelter alleged wrongdoers in the VIP gaming class. In 2014, Beijing said Jeju was becoming a “new haven” for Chinese gamblers.
Another megaresort is planned for the holiday island. In February, Genting Singapore and Mainland China real estate developer Landing International Development Ltd. broke ground on a US$1.8 billion casino resort in Jeju.
At G2E Asia, Professor Won-Seok Seo of the College of Hotel and Tourism Management at Kyung Hee University acknowledged that new casinos would rely on high rollers. That means an influx junket operators, many of which recently cut back or consolidated their operations in Macau. “The problem in Korea is that we don’t have any regulation or law on junket operators,” Won said. “We need to look into how we can regulate and manage” the promoters.
The Jeju government has also approved a bill to set up a Casino Gaming Control Board, “aiming to increase transparency in the gaming industry,” said Won.
Bobby Soper, president of the U.S.-based Mohegan Tribal Gaming Authority, said mass-market gaming on Jeju “is really going to be driven by the nongaming component… But there is a recognition that we are going to have to leverage junket business. Gaming in South Korea will primarily be driven by VIP.”
The MTGA and South Korea’s Incheon International Airport Corp are planning to develop a casino resort next to the airport.
