Kangwon Land Inc, the operator of the only casino resort in South Korea where the country’s nationals are allowed to gamble, has issued a statement saying it opposes the idea of a second casino in the country open to local patrons.
Lawmakers from South Korea’s minority opposition grouping People’s Party are reportedly seeking to submit a revising bill that could pave the way for a second casino able to accept South Korean nationals as gambling patrons.
The lawmakers plan to propose a casino for the Saemangeum Development Area, one of South Korea’s eight free economic zones.
South Korea currently has 17 casinos, but the country’s nationals are only allowed to gamble at Kangwon Land casino resort (pictured) in an upland area of Kangwon province – 150 kilometres (93 miles) from Seoul.
In a statement on Tuesday, Kangwon Land stated that it opposes the plan for a casino in Saemangeum open to South Korean nationals, reported the BusinessKorea media outlet.
“The Kangwon Land Casino was inevitable [sic] for the livelihood of more than 300,000 people in the region who lost their jobs as a result of the government-led restructuring of the mining industry,” said the casino operator in the statement, as quoted by the BusinessKorea.
“Although the Saemangeum Project is drifting now, a casino in the region cannot be justified in that it entails huge detrimental and intangible effects and the original purpose of the project is farmland supply,” added Kangwon Land’s statement.
Kangwon Land’s casino is allowed to accept South Korean locals under the Special Law on the Abandoned Mining Area. Such piece of legislation was enacted in 1995 to help the economy of Kangwon province after the closure of its mining industry.
The term of Kangwon Land’s current licence is due to expire in 2025, “though it can, and will likely, be renewed,” said a note from JP Morgan Securities (Asia Pacific) Ltd on August 3.
According to investment analysts, the Special Law on Saemangeum Development allows merely for a foreigner-only casino in the Saemangeum area.
Kangwon Land’s statement additionally said that a second casino in the country open to locals “has a complete lack of national consensus”.
“Policy demand and current attempts to build a casino in the region are not that different from those of some local governments and interest groups that tried in the past to do so in a populist way,” said the casino operator, according to BusinessKorea.
Kangwon Land last week reported net income of KRW123.7 billion (US$110.1 million) for the second quarter of 2016, up by 27.1 percent from the prior-year period.
John DeCree, an analyst at Union Gaming Securities LLC, said the brokerage “does not think there is any political appetite for a second locals licence [in South Korea] at this point”.
But he added: “We continue to believe that a locals licence in the right geography would likely exceed Singapore results in terms of a number of factors including capital investment, revenue, and cash flow.”
Mr DeCree said in the August 5 note that the new location being proposed by the People’s Party “does not make sense from a development perspective given that it is even more remote than Kangwon”. “Ultimately we do not expect this bill to gain any traction,” he added.
