The government of South Korea has pledged to ease regulations for prospective investors in resort-scale casinos.
The Tourism Ministry said a new task force has been formed to promote investment in more integrated resorts of the type planned for Yeongjong Island near Seoul and on the popular holiday island of Jeju.
To lower legal hurdles for foreign investment, the ministry said it will introduce a bidding system for selecting casino operators that is designed to speed up preliminary approvals. Such an approval, granted in March, has allowed a consortium led by Las Vegas-based Caesars Entertainment to plan a 746 billion won (US$699 million) destination casino on Yeongjong, where the country’s largest foreigners-only operator, Paradise, and partner Sega Sammy of Japan are also planning a gaming resort pegged at 1.9 trillion won ($1.8 billion). The projects are slated to open in 2018 and 2017, respectively.
The ministry says it will provide support for these projects and others like them and expects they will deliver more than 8.7 trillion won in tourism income, plus jobs and other benefits.
A consortium led by Genting Singapore also is approval for a mixed-use resort with a casino on Jeju Island, which is surging in popularity among Chinese tourists and already is home to eight casinos, but a construction start has been delayed by the island’s new governor, who said his administration was to review the project before signing off on it.
The new investment task force points to a strategic shift in government policy, which historically has tended to be hostile to gaming and still forbids its citizens from entering 16 of the 17 casino currently operating. Korean nationals can only gamble in state-run Kangwon Land in the remote northeast of the country.
The country generated the equivalent of US$2.7 billion in gaming revenue last year, which was slightly higher than the Philippines’ $2.6 billion but well behind Singapore’s $6.4 billion, and the Park administration is looking at the boom in travel out of China as a way to boost its struggling export-driven economy.
By 2020, Chinese visitors are expected to spend more than 30 trillion won ($29 billion) on goods and services in the country and accounting for nearly 8 percent of Korea’s entire domestic consumption.
A new study by Hana Daetoo Securities and the Korea Tourism Organization forecasts the number of Chinese tourists will increase at an annual rate of 19.8 percent over the next seven years, reaching 15 million by 2020.
Arrivals from China are expected to total 5.85 million this year, an increase of 35.4 percent over 2013.
“Chinese tourists have emerged as big spenders in the domestic retail sector,” said an analyst at Hana Daetoo. “They are a main growth engine fueling the growth of Korea’s consumer goods industry.”
The country’s casinos earned 43.2 percent of their revenue from Chinese gamblers in 2013. That is expected to grow to 67.5 percent by 2020.