Also building Jeju Dream Tower
South Korean travel company Lotte Tour Development has bought its first casino Paradise Jeju Lotte Casino for KRW15 billion (US$13.4 million). The purchase marks Lotte Tour’s first solo gaming acquisition, reported Asia Gaming Brief.
The company bought 100 percent of the casino, which is located inside the 500-room Lotte Hotel, from Paradise Co. The transaction includes the assumption of KRW28.4 billion (US$25 million) in debt.
“The purchase is ideal for Lotte Tour Development to enter the casino business as it comes with operational know-how from Paradise Group, including skilled casino talents such as casino dealers and its casino operation IT system,” the company said in a press release. The Lotte Hotel in the Jungmun tourist district is a popular honeymoon destination, AGB reported.
Meanwhile, Lotte is also co-developing an integrated resort on Jeju with Chinese developer Greenland Group. The Jeju Dream Tower will be the largest and tallest structure on the island and is currently built up to the 19th floor. It is scheduled to open next October, at which point the hotel casino license will likely be transferred to the larger property. Lotte will also relocate its headquarters to Jeju once the resort is complete. Lotte Chairman Ki-Byung Kim said the opening will mean 3,100 new local jobs “with the highest average income on Jeju.”
According to Union Gaming analyst Grant Govertsen, the South Korean market is “trending higher after a political spat between Beijing and Seoul hit revenue at foreigner-only casinos last year.”
In March 2017, in response to the 2016 establishment of a U.S. anti-ballistic missile system in South Korea, China banned the sale of package tours to the country. According to the Korea Tourism Organization, Chinese tourists to South Korea amounted 4.17 million in 2017, down 48.3 percent from the previous year. The decline was estimated to have slashed approximately 5 trillion won (US$4.7 billion) from South Korea’s gross domestic product last year. Last fall, China reinstated group tours to South Korea, but still limits incentive and cruise tours to the country.
Govertsen said he doesn’t expect Lotte’s new gaming hall to compete with Macau, but foresees some impact on the existing foreigners-only casinos in South Korea. Meanwhile, according to Paradise Co., in the first six months of this year, gaming volumes were up 18 percent.
“As Paradise is the bellwether, we would expect the entire market is broadly in line with Paradise,” Govertsen said.
Meanwhile, Landing International, which opened Jeju Shinhwa World in February, issued a positive profit alert to the Hong Kong Stock Exchange on July 27, pointing to a 500 percent increase in net profit driven by “the increased revenue contributed from gaming business in Jeju, South Korea.”
Jeju currently has eight operating casinos.
