S.Korea casinos still awaiting govt proposals on regulatory changes: trade boss

The secretary-general of the Korea Casino Association (KCA) has told GGRAsia the body has yet to hear from the South Korean government on how it would implement an enlarged, up to 15 percent, levy on each casino’s revenue to support a tourism fund. That is according to the KCA official, Shin Jong Ho (pictured), speaking on the sidelines of a Wednesday forum in Seoul, the country’s capital. Mr Shin said the association had only been informed that the maximum contribution rate per casino towards the Tourism Promotion and Development Fund, could rise to 15 percent of annual revenue, from the current 10 percent. “We have only been informed that the maximum rate would be 15 percent. We have not received any further details on how the rates would be adjusted,” he said. Mr Shin added that the KCA had yet to submit any response to the government regarding its idea. The association, which represents 18 licensed South Korean casinos, would determine its response once relevant draft legislation was published. “We will have to review the bill before deciding whether to accept it or how to respond,” he said. Regarding the government’s recently-announced expansion of a loan scheme via the tourism fund – for casino operators to use such loans toward infrastructure investment costs – Mr Shin said it had been introduced without prior consultation with the industry. He noted that the announcement came after many casino entities had already submitted their current round of investment applications, limiting the scheme’s practical usefulness. “The amounts are not particularly significant for the casino industry,” he said, referring to the size of loans on offer. He also noted that while casino operators might view the loan scheme as a form of incentive, those operators in the Seoul metropolitan area would be entitled to lower levels of support compared to casino businesses outside the capital. Kangwon Land new casino Mr Shin also commented on Kangwon Land Inc’s planned second casino venue. Separately, Kangwon Land Inc has set up a new committee to review the feasibility of its long-term K-HIT redevelopment project for the Kangwon Land resort. The review committee was announced soon after the appointment of a new Kangwon Land Inc chief executive, former army general Kim Do-gyun. The KCA’s Mr Shin noted regarding the second casino: “The construction tender has already been conducted, and the project has received government approval. That means the second casino venue is proceeding.” He cautioned, however, that he could not comment on possible changes to the resort’s wider development plans. According to South Korea’s online public procurement records, the country’s Procurement Service issued a tender notice on August 19 for the construction of Kangwon Land’s second casino venue. Hyundai Asan, a conglomerate covering tourism management, transport and construction, was awarded the contract on September 23 with a bid of KRW73.93 billion (US$55.3 million). A related document seen by GGRAsia indicates the new venue would house 62 gaming tables, 251 gaming machines and 128 electronic table games (ETGs). Also according to that document, the second venue plan has a construction period of 690 days from commencement. Covering 16,918 square metres (182,104 sq. feet) across two basement levels and four above-ground floors, the development will house the second casino venue on basement levels one and two. Floors one to three will feature premium retail outlets, a Korean restaurant, a food court and an event hall. Japan competition Mr Shin’s Wednesday comments followed a seminar titled “Impact Analysis of Japan’s Introduction of Casino Integrated Resort (IR)”, organised by the association, and relating to the potential competitive threat of Japan’s nascent casino industry. At the event, Kyung Hee University professor Lee Chung-ki presented survey findings indicating 52.1 percent of 493 current Kangwon Land customers, 42.7 percent of a sample of 1,250 South Korean outbound travellers, and 46.2 percent of a cohort of 79 mass-market Chinese players at South Korean foreigner-only casinos, expressed interest in visiting MGM Osaka, Japan’s first integrated resort, scheduled to open in 2030. Additionally, per the survey, 82.8 percent of a sample of 100 Chinese VIP gamblers; 78.7 percent of a sample of 141 Japanese mass-market players; and 80.2 percent of a sample of 103 Japanese VIP players, voiced interest in visiting MGM Osaka. Two other academics at the Wednesday forum – Kyung Hee University professor Han Jin-soo, and Gangneung University professor Lee Jae-seok – warned that the launch of the MGM Osaka IR could intensify competition for South Korean casino operators, including Kangwon Land Inc and the country’s foreigner-only casinos. Hanseo University professor Choi Eun-mi also warned of potential loss of the country’s casino workforce to the new Japanese industry. Professor Han and Hanyang University professor Kim Nam-jo, highlighted during the forum, concerns about the Soth Korean industry’s competitiveness as casino investment accelerates across Asia-Pacific, even before MGM Osaka opens.