Foreigner-only casino operator Grand Korea Leisure (GKL) has walked back plans to explore the possible acquisition of its own casino site in Seoul, claiming it did not meet the “necessary requirements” to pursue a feasibility study.
Two weeks after the company first broached the idea as a means of addressing excessive rental payments at its existing properties, GKL explained that although it had prepared to apply for the preliminary feasibility study with the Ministry of Strategy and Finance, it has not completed an application because the necessary requirements have not been met, we have not applied for the preliminary feasibility study.
As such, “our company currently has no plans to pursue securing our own business site,” it stated in a filing. The site in question had been the location of its Seven Luck Casino at Seoul Dragon City, one of GKL’s two casino operations in the capital city. A third is located in Busan.
As previously reported by Inside Asian Gaming, the company last month cited a “burdensome and restrictive” leased business structure as a reason to consider an acquisition, with annual rent payments estimated at between KRW30 billion and KRW40 billion (US$20.3 million and US$27.1 million) – representing more than half of the company’s annual operating profit.
The lease model also imposes restrictions on GKL’s ability to adjust floor space or renovate to enhance the property’s appeal at a time when competition for international customers has never been higher, it explained at the time.
GKL had been looking at “environmental improvement” rather than “scale expansion” because developing an integrated resort-style offering from scratch is not considered feasible.
Aside from Seoul Dragon City, GKL operates Seven Luck Casino – Gangnam COEX in Seoul and Seven Luck Casino at Busan Lotte Hotel.
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