Asia’s casino boom will leave South Korea behind unless the country’s citizens are allowed to gamble in them, says a leisure industry consultant.
All but one of the country’s 17 casinos are off limits to domestic players, a ban that Steve Park, managing director of market entry firm KORE, termed the single greatest obstacle to convincing the international gaming companies to invest and one he said will cause South Korea to “irrevocably fall behind in the global market” if it is not addressed.
Speaking at last month’s G2E Asia in Macau, Park said South Korea’s government was right to welcome foreign investment in large-scale resort development but called for more concerted action to minimize the competitive threats, particularly from Japan, which is considering ending a longstanding ban on casinos. If that happens, he said, “a large sum of investment capital will then flow into the Japanese market, leaving little for Korea to profit from”.
The casino industry, “more than any other sector, involves an economy of scale, and thus requires a hard investment,” he noted, and without local gamblers, the big names “will hesitate to commit themselves”.
Last year, one-fifth of all tourists to South Korea visited a casino, according to government figures, and the number of Chinese gamblers rose 245 percent between 2009 and 2013.
Paradise Group, the country’s largest foreigners-only operator by number of properties, reported a 17.7 percent year-on-year increase in revenue through the first quarter to KRW170.5 billion (US$166 million). The second largest, Grand Korea Leisure, reported a 5.5 percent increase to KRW139.1 billion. But neither generated as much as Kangwon Land, the only casino open to Korean nationals, which reported a 9.1 percent increase to KRW373.3 billion despite its remote location in a former coal-mining region in far northeast of the country more than 200 kilometers from the capital of Seoul.
