South Korean casino operator Paradise Co Ltd broke ground on Thursday at the site of its planned US$1.7 billion Paradise City casino resort (pictured in a rendering) at Incheon, near the country’s capital Seoul, according to a report in the Korea Herald newspaper. The development is scheduled to open in 2017.
Paradise is a partner with Japan’s Sega Sammy Holdings Inc for the scheme at Yeongjong Island in the Incheon Free Economic Zone. Paradise holds a 55-percent stake in the joint venture according to previous statements by the company.
The project includes hotels, restaurants, and – as local law currently stands – a foreigners-only casino. The casino resort will have 160 gaming tables and 340 slot machines and 750 hotel rooms, according to a recent note from Daiwa Capital Markets.
“Above all, the resort complex boasts of a geographical advantage in that it is located within walking distance from Incheon International Airport,’’ Paradise Sega Sammy Co Ltd chief executive Choi Jong-hwan told reporters on Thursday, according to the Korea Herald.
According to Paradise, the resort will be a 15-minute walk from Incheon International Airport, the largest airport in South Korea and serving the country’s capital, Seoul.
Mr Choi has said in recent interviews that the casino at Paradise City would establish a massive junket operator network to bring in high rollers from mainland China.
Standard Chartered Equity Research, in Kong Kong, said in a recent report that the South Korean government would like China to be contributing half of the projected 20 million inbound tourists the country seeks to attract annually by 2017, versus 4 million out of 12 million total tourists China contributed in 2013.
But achieving break-even on the Paradise City scheme could still be tough as South Korea allows only foreign passport holders to enter casinos, admitted Mr Choi. Currently, only Kangwon Land – a difficult-to-access casino resort 150 kilometres (93 miles) southeast of Seoul in Kangwon province – is open to locals.
The Paradise Sega Sammy CEO said he expects it to take at least a decade before Paradise City turns a profit. According to the country’s National Gambling Control Commission, total turnover from all gambling activities in South Korea in 2013 was US$19.2 billion, with the bulk of it – US$7.5 billion – coming from horse racing. Casino gambling accounted for US$2.2 billion.
Yeongjong Island has attracted investment interest from several international casino brands, including U.S.-based Caesars Entertainment Corp. Also this week, it was reported that Chow Tai Fook Enterprises Ltd plans to invest US$1.6 billion in a new casino resort at Incheon.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal