GGRAsia – Melco Crown not eyeing South Korea, for now

Melco Crown not eyeing South Korea, for now

Feb 03, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Casino operator Melco Crown Entertainment Ltd is not planning to bid for a gaming licence in South Korea, at least not until the country allows locals to gamble at home, said one of its top executives.

“In our opinion, [a] foreigners-only gaming market is difficult. [South] Korea and its policy of not letting locals in, to us, is difficult,” Melco Crown’s chief executive, Lawrence Ho Yau Lung (pictured), said on Monday according to Reuters news agency.

Mr Ho spoke to reporters in Manila, where he led the official opening of City of Dreams Manila. The executive said the casino operator would now focus on ramping up operations at its newly opened property in the Philippines.

The South Korean government last month said it would approve two more foreigners-only casino resorts, each to include a minimum investment of KRW1 trillion (US$912 million).

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 government however has said little recently on whether it might allow other casinos in the country to open their doors to locals. Operators investing in the country are currently banking on its proximity to northeast China and its ability to attract growing numbers of Chinese gamblers.

South Korea has already approved two foreigners-only gaming resorts near Incheon International Airport, 50 kilometres southwest of the capital Seoul. They include one project by a consortium involving U.S.-based Caesars Entertainment Corp and Hong Kong-listed Lippo Ltd, and one that is a joint venture of local casino operator Paradise Co Ltd and Japan’s Sega Sammy Holdings Inc.

On Monday, Mr Ho said that in his opinion areas like Incheon cannot guarantee a daily traffic of 30,000 visitors, a key requirement to make an integrated casino-resort project viable, Reuters reported.

“But one day, if the government changes its policy about locals, we would jump in head first,” Mr Ho was quoted saying.

In July it was reported that representatives from Melco Crown had met with authorities from Osaka, in Japan, to discuss building a casino resort in the city. Japanese authorities are currently considering legalising casino gambling in the country. Analysts have said that delays in Japan could benefit South Korea’s gaming market, as the new casino resorts in the latter country are scheduled to open between 2017 and 2018.

“We view the company as a strong competitor for an urban [Japanese] location, particularly as its cash flow and leverage position should improve materially with the opening of City of Dreams Manila…and Studio City [Macau] in mid-2015,” said Union Gaming Research LLC analysts Christopher Jones and John DeCree in a recent report.