SOUTH KOREA

Projects progress as revenue picks up

South Korea’s foreigner-only casinos have seen revenue improve in the first half, with progress made on IR plans, though there are still hurdles on the road ahead.

Paradise SegaSammy opened new facilities at Paradise City in September, with a greater emphasis on entertainment, completing the first phase of the development.

Paradise City, South Korea’s first full integrated resort opened in April 2017, with a strong focus on art. The property, near the Incheon international airport, is a joint venture between South Korea’s Paradise Co. and Japan’s Sega Sammy.

The facilities developed under Phase 1-2 feature 110,000 m2 of floor area and are comprised of a boutique hotel, Art Paradiso; a premium spa, Cimer; a club, Chroma, which will be the largest in Northeast Asia; an art gallery, Paradise Art Space; an event-type shopping mall, Plaza; a cutting-edge film studio, Studio Paradise and an indoor family entertainment facility, Wonderbox, together with other facilities.

“The opening of the facilities developed under Phase 1-2 marks the end of development for Phase 1 and completion of PARADISE CITY as a genuine art-tainment resort where healing and play can be experienced at a single site,” it said.

Paradise reported an almost 20 percent gain in casino revenue in the year to August, marking a sharp recovery in fortunes after a political spat between Beijing and Seoul hit sales at South Korea’s foreigner only casinos last year. Table games were up 19.9 percent year-to-date, while revenue from machines gained 16.9 percent.

Rival operator Grand Korea Leisure, which operates three casinos under the Seven Luck brand, posted strong August figures, though its results year-to-date have been lacklustre. Casino sales rose 21.8 percent in August to approximately KRW50.7 billion (US$45.3 million) for that month. For the first eight months, sales grew by 1.9 percent year-on-year, to approximately KRW326.4 billion. Table game sales for the January to August period rose by 4.8 percent from the prior-year period to about KRW288.4 billion. Machine game sales declined 16.2 percent in the eight months to August 31, to nearly KRW37.8 billion.

Much of the focus so far this year has been on developments on Jeju, an island off the south of the country popular with South Korean honeymoon couples.

Construction at Lotte Tour Development’s Jeju Dream Tower is making significant progress. The company recently bought Paradise’s Jeju Lotte Casino for $39 million and had been expected to transfer that license to its new IR on completion next year..

However, Jeju’s governor noted in September that he may seek legislative changes to block the transfer of gaming licenses from one property to another.

When this integrated resort opens by October of next year, 3,100 new jobs with the highest average income in Jeju will be created.

Lotte is seeking to raise KRW240 billion in a rights offering to complete construction of the project, which will be Jeju’s second IR.

Once completed, Jeju Dream Tower is set to be the tallest and largest landmark on Jeju island, at 169 meters in height with 38 floors.

“Now that mid-payments are fully financed with the rights offering, the last pieces of the puzzle in Jeju Dream Tower Integrated Resort construction are coming together,” said Lotte Chairman Ki-Byung Kim.

“Jeju Dream Tower Integrated Resort is currently constructed up to 20th floor. When this integrated resort opens by October of next year, 3,100 new jobs with the highest average income in Jeju will be created.”

Lotte Tour Development plans to relocate its headquarters to Jeju once the resort opens, becoming the largest local company and contributing the most tax.

Jeju has eight operating casinos, including Landing International’s Jeju Shinhwa IR.

Landing International, which operates Jeju Shinhwa, says its chairman went missing in August and it has not been able to contact him, prompting regulators on the island to say they would monitor the casino on a precautionary basis.

Jeju teens have a gambling problem

High school and middle school students on Jeju Island are at a high risk of gambling addiction, a new survey has found.

According to the survey, 11.9 percent of high school students and 5.4 percent of middle school students are at a high risk of gambling addiction. The survey looked at 671 middle school students and 328 high school students ranking them from low to high risk.

One teenager surveyed said he had lost KRW 10 million on sports betting and other forms of gambling, and has stolen money from friends and parents to fuel the addiction.

Another Kangwon CEO caught in corruption net

Former head of Kangwon Land, Ham Seung-hee, has been accused of corruption, after unionized employees of the casino reported him for using millions of dollars worth of company funds for his own personal use, Korea Herald reports.

Ham, who was once a well-known prosecutor and lawmaker, is suspected of charging around KRW 70 million (US$63,100) to the company’s corporate credit cards for personal use.

Lawmaker Song Ki-hun of the ruling Democratic Party said that Ham used corporate credit cards 636 times during his time as CEO from 2014-2017, and alleged that nearly half of the transactions were made at businesses only minutes away from the residence of a woman that he was suspected of having an affair with.

“We want the truth to be revealed on every single corruption allegation made against Ham,” said the union members in a statement.