South Korea says it will reopen bidding to “qualified” operators interested in developing resort casinos in the country’s Free Economic Zones.
After rejecting applications a few months back by Las Vegas-based Caesars Entertainment and Kazuo Okada’s Universal Entertainment, the government is taking a fresh look at foreigners-only gaming as a tourism driver, and a framework for regulating them in the FEZs will be unveiled next month, according to the Ministry of Trade, Industry and Energy.
In July, the administration of President of Park Geun-hye announced a plan to invest a total of 82 trillion won (US$72 billion) to complete the development of eight FEZs by 2022, with a long-term goal of attracting as much as $20 billion in foreign investment.
Destination-scale casinos capable of boosting inbound tourism are viewed as an important part of the strategy, and to attract both foreign and domestic developers, the government is prepared to provide a friendly tax and regulatory environment sweetened with other incentives, according to a report in English-language daily The Korea Times.
As to why Caesars and Tokyo-based Universal failed to make the cut, no reasons were publicly given, but it was the Ministry of Trade that specified “qualified” in a statement on the new plan.
Caesars, the largest casino operator in the United States, is laboring under the indusry’s heaviest debt load as the result of a 2008 buyout by private-equity interests. Universal is under criminal investigation in the Philippines and the US in connection with dealings related to its planned development of a resort casino in Manila.
The South Korean government has approved one FEZ casino proposal to date — a KRW800 million ($730 million) joint venture in Incheon between Paradise Group, one of the two operators that dominate the country’s foreigners-only market, and Japanese pachinko giant Sega Sammy Holdings. The resort is slated to open in phases beginning in 2016 with two hotels, a theme park, a convention center and a casino featuring 450 table games at full build-out.
The current market is generating about US$2 billion a year from 16 moderately sized casinos catering mostly to Chinese and Japanese visitors and one large and lucrative casino in the remote northeast of the country that is open to Koreans.
RelatedPosts
