Foreign interest dampened by ban
PricewaterhouseCoopers Korea market analyst Glenn Burm says the long-term monopoly held by the only South Korean casino open to locals could keep lawmakers from reconsidering a ban on locals play elsewhere for nine years.
At G2E in Macau recently, Burm told the Asia Gaming Brief the issue may not come up for approval until 2025, when Kangwon Land’s guaranteed exclusivity expires.
The remotely located resort accounts for $1.7 billion of the country’s total gross gaming revenue of about $2.8 billion, AGB reported.
“Kangwon Land has a monopoly until 2025 so it would be really hard to reopen the discussion until then we believe, because someone really has to come up new legislation to open up the discussion, special legislation,” Burm said.
“Politically, economically, if Japan were to open up and promote casino markets maybe, it would be considered, but because the current situation in Japan is on hold, the government might say the current situation in Korea is fine,” he added.
Korea is seen as a potentially significant market for Asian gamblers because of its proximity to China, but the ban on locals has discouraged foreign investment. A 2015 request for proposals for two new integrated resort licenses attracted 36 bidders out of the gate, and then dwindled to one. The license was granted to U.S. tribal operator Mohegan Sun.
As in other jurisdictions, Burm said, casinos will need to generate strong non-gaming revenue to sustain profitability. “It’s critical that they raise more than 50 percent of revenue from non-gaming section to be successful. The number of foreign visitors is limited and the increase in visitors may be limited as well, so … you need to secure domestic people coming in to the resort as well and foreign visitors coming in with families to spend time.”
