Major operators bowed out of market
Now may be just the wrong time to expand the gaming industry in South Korea, says Seoul National University Professor Pyo Hak K.
At a seminar reported by the Asia Gaming Brief, the honorary professor of economics said new resorts now in the planning stages could lead to excess supply. “Additional construction of integrated resorts without a proper estimation of demand can lead to oversupply, as such is the case on Jejudo Island where resorts are sustaining on deficit operation,” he said.
Two integrated resorts are now in development on Yeongjondo Island, from Korean casino-operator Paradise and the Lippo and Caesar Consortium or LOCZ Korea, a joint venture between the Chinese and American companies. In addition, South Korean chemical company KCC Corp. has joined with U.S. tribal casino operator Mohegan Sun in a proposal to develop a casino resort on the island.
Two other leading casino operators, Grand Korea Leisure Co. Ltd. and Hong Kong-listed NagaCorp Ltd., originally planned to bid for a license in South Korea. But in recent weeks both withdrew, saying a foreigners-only casino may not be viable in the region. South Korea bans locals from gambling in all but one of its 17 licensed casinos. Another discouraging factor may be softer economies in the region, which could make gamblers more conservative with their discretionary funds.
