South Korea Unlikely To Permit Local Entry Into Casinos Till 2025
South Korea is not likely to allow local residents to access its casinos as long as the monopoly of the state-owned Kangwon Land continues to exist according to a market expert.
Kangwon Land has a monopoly over local gaming till 2025 based on the current law. South Korea currently bars locals from playing in casinos other than Kangwon Land located in Gangwon Province. It is the country’s largest casino and accounts for a major portion of the country’s gaming revenue. As per latest reports, the casino revenue was around $1.7 billion while the entire gaming gross gaming revenue from the country’s 17 casinos was approximately $2.8 billion.
According to Glenn Burm, partner at PwC Korea the situation is not likely to change until Kangwon Land’s monopoly ends or until a special legislation is passed for effecting the change. Burm also stated that possibility of a change will be higher if Japan had expanded its casino industry. But with Japan also not doing much to promote its casino industry, the government in South Korea is likely to be unwilling to change the status quo.
South Korea has had significant opportunity to expand its casino market given its geographical proximity to China and also the wide popularity of its cultural exports such as K-pop. But the market has unable to expand rapidly due to the ban on locals. Last year, the number of proposals for two integrated casino resorts dropped to just one, despite starting with 36 bidders. The bidders cited concerns of the viability of operating a large casino relying on just foreign arrivals. The outbreak of Middle Eastern Respiratory Syndrome around that time highlighted the worries as it affected the inflow of foreign tourists significantly, resulting in a sharp drop in revenue for the two casino operators running foreign-only casinos, Paradise Co. and Grand Korea Leisure (GKL).
In a statement, Glenn Burm, said
We analyze, it’s critical that they need to raise more than 50 percent of revenue from non-gaming section to be successful. The number of foreign visitors is limited and the increase in visitors may be limited as well, so in order to secure the profit you need to secure domestic people coming in to the resort as well and foreign visitors coming in with families to spend time
Chinse tourism has improved in the recent months, as reflected in the sales at GKL and Paradise. But market experts have said that without significant hike in tourism numbers, the two new integrated casinos resorts which are yet to open will find it hard to survive.
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