Kangwon monopoly ends 2025
The People’s Party of South Korea, a minority opposition group, is pressing for a second locals casino in the country, which currently forbids nationals from gambling in all but one of 17 casinos. That casino, Kangwonland casino resort, is located in remote Kangwon Province in the Himalayas, 93 miles from the capital city of Seoul, reports GGRAsia.
With new 38 new seats in the country’s National Assembly, the People’s Party now controls almost 13 percent of the 300-member body. Members plan to propose a casino for the Saemangeum Development Area, one of South Korea’s eight free economic zones, about four hours by car from the capital. Existing development plans for Saemangeum indicate it will have three districts, including one for tourism and leisure that spans 36.8 square kilometers (14.2 square miles).
“Some lawmakers are working on a revision bill for the creation of an integrated casino resort, like Marina Bay Sands in Singapore, that allows access to Koreans,” party spokesman Kim Kwan-young told the Korea Times.
Analysts at JP Morgan Securities are doubtful the South Korean government will open a second casino to domestic players. In a note, DS Kim and Daisy Lu wrote, “The Special Law on Saemangeum Development only allows a foreigner-only casino in this area. Thus, in order to open a local casino, the Special Law must be fully revised and pass the National Assembly, which is not an easy task.”
But Kim told the Times he has the support of fellow lawmakers from Jeolla, including some on the National Assembly’s Land Infrastructure and Transport Committee, which deals with the Saemangeum Special Law.
He added that safeguards could be established to curtail excessive or problem gambling among locals, as is the case at Kangwon Land; for example, the casino could require an entry fee for locals, and prevent them from entering the casino more than 10 days per month. Currently, Kangwon Land demands an entry levy of KRW9,000 (US$8) for locals.
But the JP Morgan team said it may be difficult for a minor opposition party to “gain political and public consensus on this sensitive matter, as there will likely be significant push-backs from Kangwon Province and many other cities/provinces that have been lobbying to have local casinos (such as Incheon, Jeju, Busan, etc.).
“Moreover, the Ministry of Culture, Sports and Tourism, which regulates the casino industry in South Korea, has been consistently opposing the idea of opening another local casino.”
In a June report, Fitch Ratings Inc. said as much, noting “low political inclination for expanding gaming to locals in South Korea,” despite interest from global casino operators like the Las Vegas Sands Corp., which sent representatives to the port city of Busan, South Korea’s second largest city.
The Korea Economic Daily reported that the Sands Corp. would be uninterested in investing in the area unless the resort would be open to locals.
Meanwhile, Kangwon Land issued a statement saying it opposes the idea of a second casino in the country open to local patrons, saying the casino employs “more than 300,000 people in the region who lost their jobs as a result of the government-led restructuring of the mining industry. Although the Saemangeum Project is drifting now, a casino in the region cannot be justified in that it entails huge detrimental and intangible effects and the original purpose of the project is farmland supply.”
The JP Morgan analysts doubt the law will be changed anytime soon to add a second locals casino. “It would be disastrous for Kangwon’s monopoly business,” they wrote. “But we see the possibility of this happening as very low in the foreseeable future—at least not until 2025” when Kangwon’s exclusive term ends.
Glenn Burm of financial services firm PwC Korea told GGRAsia in May that he expected the operator of the Kangwon Land casino resort “to do whatever they can to try to stop other players in the domestic market.”
In 2015, the South Korean Ministry of Oceans and Fisheries proposed a plan that would have allowed citizens to gamble aboard cruise ships, an effort that went down in defeat.
