NORTH ASIA 20
south korea
Japan clouds Korea’s IR-hub aspirations South Korea wants to turn the area near Incheon International Airport into a version of Manila’s Entertainment City, but its vision is at risk from competition from Japan.
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However, locals are banned from gambling n December, the Incheon Metropolitan Government reaffirmed its optimism except in a remote mountainous resort that the Yeongjong-do Integrated Resort owned by Kangwon Land. This puts it at a Cluster Project will become a “hub of major disadvantage when compared with the culture and tourism industry in North Asia,” Philippines’ Entertainment City, where the with the potential to create some 20,000 jobs, IRs enjoy strong local support. Japan is also generating economic benefits of about $1.68 expected to permit its nationals into casinos with an entry-fee system similar to Singapore. billion annually. The 2017 crisis sparked by the U.S. deployment However, at the G2E @ the Philippines trade show in Manila in late 2019, Nicholas Kim, project of the Terminal High Altitude Area Defense director of the Incheon Free Economic Zone, (THAAD) system on the Korean peninsula observed that before Japan opened the door highlighted the issues faced by locals-only casinos. Beijing banned to IRs, global operators group travel, which lined up by the dozens triggered a 61 percent in response to requests drop in Chinese arrivals for proposals in Incheon. The more from March to October Now, he said, the IFEZ has to wait days or weeks for important, I believe, in that year. Those tensions have one or two expressions is the expats: now waned and tourism of interest. the Chinese, recovered strongly last Kim said South Korea year. Paradise Co. casinos has about 65 percent Japanese and in Incheon, Seoul, Busan of an anticipated $10 other international and Jeju Island saw casino billion in funding for revenues increase 23.4 the market. By contrast, residents who percent year-on-year in several operators bidding reside in Seoul. 2019, reaching KRW on Japan have pledged 784.8 billion (US$673.1 that much for a single IR. million). The increase Currently, there is was largely the result of just one casino resort in Incheon: Paradise City, a venture between a jump in casino revenue from its Incheon South Korea’s Paradise Co. and Japan’s Sega IR Paradise City, which was up 51.2 percent Sammy. But two more are in the works: the $700 from 2018. “We’ve seen exciting year-on-year growth million Caesars Korea, which is due to open in 2021, and Mohegan Gaming & Entertainment’s and definite recovery from the downtrend of Inspire, with a price tag of at least $3.5 billion, the past few years,” said Michael Zhu, gaming analyst for The Innovation Group. which will open in phases starting in 2022. Although locals can’t gamble, they are a Two non-gaming resorts are also planned, but they will be run by gaming companies, significant source of non-gaming revenue and Philippine-based Bloomberry Resorts and Japanese the IRs are offering an abundance of leisure pachinko firm Maruhan Co Ltd., presumably attractions, such as Paradise City Incheon’s new Wonderbox fantasy theme park, which leaving the door open to more gaming. Incheon’s appeal lies in its proximity to opened in March. “While locals cannot walk into a casino, cities in Northern China and in Japan and in the attraction of cultural phenomena, such as K-Pop. in terms of non-gaming revenue, the local
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Asia Gaming Briefings | January 2020
or domestic segment is the largest,” he said. The gaming side relies on several key demographics. “The more important, I believe, is the expats: the Chinese, Japanese and other international residents who reside in Seoul,” along with VIP customers brought in by junket operators, said Zhu. Then there are international visitors. “They can head to the airport, check in their luggage, then hop on a shuttle bus going between Paradise City and the terminals. It’s only a 10-minute ride,” said Zhu. For that reason, Incheon International is a linchpin of the plan to draw more high-value casino customers. It consistently ranks high on the Skytrax list of the world’s best airports,
