S. Korea to ease regulations on integrated resorts with casino
Published : 2014-08-12 10:25
Updated : 2014-08-12 10:25
South Korea will lower regulations for building integrated resorts incorporating a wide range of tourist contents with gaming facilities to help boost its economy and tourism industry, the Ministry of Culture, Sports and Tourism said Tuesday.
In a meeting of the trade and investment promotion committee presided over by President Park Geun-hye, the tourism ministry said it will support mega resort projects under way on Yeongjong Island, the nation's main gateway, and the southern resort island of Jeju, and ease casino license rules to draw more foreign investment.
"Asian nations such as Macau and Singapore are competitively building global resort complexes to attract foreign tourists, but South Korea has fallen behind in building world-class casinos," the ministry said in its report. "We will look at the ongoing resort projects and form a task force team to help resolve their difficulties."
South Korea has been strict in issuing casino licenses on concerns over gambling addiction, but the government has recently eased up, hoping to take a share in the rapidly expanding Chinese gambling market.
Building casinos in resort complexes is part of government efforts to attract Chinese tourists who are major customers at casinos across the world, with competition to attract them stiffening throughout Asian countries.
There are 17 casinos in Korea with 16 open to foreigners. Kangwon Land, located in the remote mining town, is the only place where Koreans can legally gamble.
Eight of them are located on the southern resort island of Jeju, which has become a popular destination for Chinese tourists for its accommodative visa policy.
South Korea generated 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, according to research house CIMB.
In a bid to lower legal hurdles for foreign operators, the tourism ministry said it will introduce a bidding system for selecting casino operators by the first half of next year.
"We will revise related regulations to foster integrated resorts and draw up systematic measures," the ministry said. "We will adopt an open bidding system to give a preliminary approval for establishment of integrated resorts."
To encourage more development in the sector, the tourism ministry in March gave a preliminary approval to LOCZ Korea, a joint venture between Las Vegas-based Caesars Entertainment and Indonesian conglomerate Lippo Group, to open a foreigner-exclusive casino on Yeongjong Island.
LOCZ Korea plans to invest 746.7 billion won (US$699.8 million) in building the casino resort by 2018 as the first stage of the project and complete it by 2023 by spending a total of 2.3 trillion won.
Paradise, South Korea's largest casino operator by sales, is also pushing for a 1.9 trillion won resort project on Yeongjong Island, preparing to earn a casino license.
Another sizable project under way on Yeongjong Island is "Dream Island," which is jointly pushed by the Ministry of Oceans and Fisheries and the World Han Sang Dream Island group, a Korean expatriate community from around the world. The 2 trillion won project will consist of hotels, shopping malls and other facilities, but it is not yet known whether it will seek a casino license.
On Jeju Island, a joint venture by Chinese property developer Landing International Development and Genting Singapore PLC, Asia's largest resort operator by value, is developing a 2.6 trillion won resort by 2017, with eye on opening a large-scale casino facility.
The tourism ministry said it will provide support for these projects, expecting the four resorts to deliver more than 8.7 trillion won in tourism income and create jobs.
Market watchers also saw a promising growth potential in South Korea's casino industry, citing its proximity to China and rising popularity of its pop culture.
"Macau's casino industry has rapidly grown in the last decade, while South Korea has recently seen a big surge of revenue from Chinese tourists," Kim Yoon-jin, an analyst at Daishin Securities Co., said. "South Korea is expected to see a jump in the casino industry in the next five years." (Yonhap)