Casino cruises would serve locals
Are international gaming companies betting on the liberalization of casino regulations in South Korea?
According to GGRAsia, analysts say major investments planned for Incheon International Airport and Jeju Island will pay off big only if the government reconsiders its prohibition on gambling by residents. Just one of South Korea’s 17 casinos is open to Korean nationals, and it is in a remote area far from the capital of Seoul.
Fitch Ratings says it has a “cautious view” on the potential of planned foreigners-only South Korean properties. The projects include Resorts World Jeju, led by Genting Singapore Plc.; a Caesars Entertainment Corp. venture at Incheon; Paradise City, a project of existing foreigners-only operator Paradise Co. Ltd. and Japan’s Sega Sammy Holdings Inc.; and a partnership between the Mohegan Tribal Gaming Authority of Connecticut and the Incheon International Airport Corp.
But opening the country’s casinos to locals “might not prove the panacea that some in the casino industry predict,” GGRAsia noted, “especially if the government sought to impose limits on access by locals or on their daily spend while still demanding high levels of capital investment.”
A proposed fleet of casino cruise ships would allow Koreans to play on the high seas, but would limit them to less than US$100 for a five-day trip, according to a report from the official Yonhap News Agency. That plan, which has not yet been approved, has come under fire from the country’s sole locals casino, Kangwon Land.
Despite its remote location, Kangwon Land posted a near 25 percent rise in net profit in the first quarter. The casino’s exclusive right to serve local gamblers in the land-based market is guaranteed until 2025.
Competition for players, both high rollers and mid-market, foreign and local, “will intensify over the next few years with legalization looming in Japan and Vladivostok’s first casino due to open this year,” according to a note by Fitch Ratings. “In addition, US$20 billion of capital is being deployed in Macau through 2017, along with improving transportation infrastructure.”