Feb 24, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck
The South Korean government should select later this week the winners of up to two new casino resort licences, the country’s Yonhap news agency reported on Wednesday, quoting unidentified industry sources.
The country’s authorities are currently reviewing a group of proposals for new casino resorts, submitted as part of an integrated resort license bidding process initiated in 2015 by the Ministry of Culture, Sports and Tourism.
Yonhap’s report stated that the final examination of bids was scheduled to take place between Wednesday and Friday. The licences up for grabs are for foreigner-only casinos.
South Korea currently has 17 casinos, but the country’s nationals are only allowed to gamble at one of them – Kangwon Land in an upland area of Kangwon province.
The ministry has not released any schedule for the announcement of the winners of new casino resort licences. Unidentified sources told Yohnap the announcement should be made shortly after the review process was completed.
The Yonhap report said a total of six companies had submitted proposals for new casino resorts in South Korea. Four proposals were for Incheon, near the country capital Seoul; one for the southwestern port city of Yeosu; and the other for Jinhae, a southeastern port city.
According to Yonhap, only two bids met the minimum investment requirement of KRW1 trillion (US$811.3 million), with a minimum foreign investment component of US$500 million.
Under the terms of the bidding process, the casino in each project is limited to 5 percent of the total gross floor area of the project. Additionally, the venue must offer at least 1,000 hotel rooms, 20,000 square metres (215,278 sq feet) of retail space and a “themed attraction”.
The South Korean government has not identified the bidders nor how many proposals were submitted. Investment bank Morgan Stanley said in January there were a total of four bidders for the two new casino resort licences: Hong Kong-listed Imperial Pacific International Holdings Ltd; U.S.-based casino management firm Global Gaming Asset Management LLC and Chinese firm Long Runn Global; a joint venture between U.S.-based Mohegan Tribal Gaming Authority and South Korean chemicals manufacturer KCC Corp; and South Korean firm Ocean View.
Some companies that had initially shown interest in getting a casino licence later announced they would not bid for the development of an integrated resort in South Korea, including Grand Korea Leisure Co Ltd and Hong Kong-listed NagaCorp Ltd.
In its January note, Morgan Stanley said new casino supply did “not bode well” for South Korea’s foreigner-only casinos, especially as the investment bank expected the number of Chinese high rollers to South Korean casinos to continue declining.
There is already a large-scale casino resort under construction in Incheon, scheduled to open in 2017. South Korean foreigner-only casino operator Paradise Co Ltd has linked with Japanese pachinko operator Sega Sammy Holdings Inc for the project, referred to as Paradise City. The scheme, with a total area of 330,000 square metres (3.55 million sq feet), is presented in its official website as having a price ticket of KRW1.3 trillion and featuring a foreigner-only casino with 160 casino live table games, 388 electronic table games and 350 slot machines.
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