Tokyo-based pachinko operator Sega Sammy Holdings Inc from Japan has concluded the cancellation of a resort project previously announced for South Korea’s port city of Busan. The company says it wants to focus on its Paradise City casino resort at Incheon, also in South Korea.
Paradise City is being developed by Paradise Sega Sammy Co Ltd, a joint venture firm set up by Sega Sammy in partnership with South Korea’s Paradise Co Ltd – an operator of foreigner-only casinos in that country. The property is to launch its first phase on April 20, Sega Sammy said in a March 9 filing.
The Japanese firm said on Wednesday it had reached an agreement with the Busan authorities to transfer to the Busan Metropolitan City land previously acquired in 2013 for a resort project. The land deal now announced involved a KRW94.4-billion (US$83.4-million) transfer price, below the KRW119.3 billion initially paid by the Japanese firm.
Sega Sammy said it decided to drop the Busan project to “concentrate management resources” on Paradise City and to “further improve investment efficiency”.
Sega Sammy had first announced plans for a resort in Busan in January 2013. The purpose of the project was “to accumulate further know-how on the development and operation” of resort complexes, Sega Sammy said at the time. It is unclear from Sega Sammy’s filings if the Busan development would feature casino facilities.
The project included a total investment of KRW272.2 billion – excluding land acquisition costs – and was scheduled to open in September 2016. However, construction did not move ahead.
Last December, Sega Sammy stated it would “discontinue” the Busan project, following a group-wide internal business review.
Global casino operator Las Vegas Sands Corp has repeatedly shown interest in having a casino resort in Busan. But company executives have reiterated that – for such a casino resort investment to be viable – locals should be allowed to gamble in the casino, namely on similar terms to those granted to Singapore’s casinos by the Singapore government.
South Korea has 17 casinos but only one – Kangwon Land in a remote upland area – is allowed to serve South Korean nationals.
In 2016, South Korea received just over 17.2 million overseas visitors, with nearly 47 percent of the tally – or over 8 million arrivals – generated by China, according to figures published by the Korea Tourism Organization.
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Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors