NORTH ASIA 32
south korea
Jeju projects face headwinds Plans to build two of South Korea’s biggest resorts on the southern island of Jeju are facing headwinds, amidst financing shortfalls and declining revenue.
H
ong Kong-listed New Silkroad However, the casino performed poorly in 2019 Culturtainment admitted in a due to trade tensions. For 2019, New Silkroad reported that revenue recent filing that land development for its Glorious Hill project has not from continuing operations decreased by 7.3 begun due to a lack of funding, despite having percent to HK$211.2 million. Revenue from the received the relevant development approvals group’s wine business was up 3.5 percent, though revenue from entertainment fell 20.2 percent. in March 2019. The South Korean unit has also faced The company, which is active in the real estate sector and operates wineries in China, ongoing litigation, with the Jeju Prosecutor’s announced its entry into the IR business in Office filing an appeal against a decision to late 2015. The group said it saw the potential acquit Megaluck on charges of violating the to broaden its revenue base and was seizing Tourism Promotion Act. The case involves an the opportunity posed by the increasing indictment for outsourcing the management of slot machines to popularity of the Korean Global Game Co. culture in China. Another Hong The HK$7.5 billion Kong-listed company, Glorious Hill project Revenue from Landing International is on a site spanning gaming plunged Development, is in the about 1.3 million square process of developing metres and was due to from $1.48 billion what will be the biggest comprise a five-star hotel to $213 million IR on the island and also with about 570 rooms reported weak gaming in the first phase, as last year, it said, figures for last year. well as commercial and giving no further Landing is seeking residential real estate, an to raise $137.1 million entertainment complex, explanation. ($17.6 million) through a healthcare, a theme park placing of shares to support and a golf course. ongoing operations. Jeju island is a popular For 2019, the company said revenue dropped destination for South Korean honeymooners, but in recent years has also drawn more by about 61 percent to HK$815.5 million, while Chinese tourists, helped in part by its visa- its loss ballooned to $2.1 billion from $705.1 free entry policy. It boasts a cluster of smaller million the prior year. Landing attributed the fall in revenue and casinos, though larger projects have been broader loss to a decline in its gaming business. slow to progress. New Silkroad gained control of the Jeju It said a fair value loss on investment properties, Government’s Gaming License No. 8 through the impairment of property plant and equipment the acquisition of a stake in a local company as well as an increase in depreciation charges in December, 2015. The license permitted the had also been contributing factors to the loss. Revenue from gaming plunged from $1.48 company to operate a casino in the KAL Hotel, which had about 29 tables and 24 electronic billion to $213 million last year, it said, giving no further explanation. gaming machines. Landing operates Jeju Shinhwa World, which It subsequently renamed the property MegaLuck to appeal to its Chinese clientele. spans an area of about 2.5 million square metres.
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Asia Gaming Briefings | May 2020
