An exterior view of the Paradise City, South Korea’s first casino and hotel complex, which opened in Yeongjongdo, close to Incheon International Airport, west of Seoul yesterday. (EPA photo)
SEOUL: South Korea’s first casino resort has been unlucky with the timing of its grand opening as a diplomatic spat scares off gamblers from neighbouring China who usually account for about half of Korea’s foreigner gaming revenue.
The country’s largest casino operator, Paradise Co Ltd, and Japanese slot machine maker Sega Sammy Holdings Inc opened Paradise City yesterday, five minutes’ drive from Seoul’s Incheon International Airport, just 329 kilometres (204 miles) across the Yellow Sea from China.
But blunting the benefits of proximity is a ban on Chinese travel agents selling tours to South Korea to protest a planned anti-North Korea missile defence outside Seoul.
To offset any revenue drop, Paradise and Sega Sammy said that they would target consumers in Japan and Southeast Asia.
“It’s a pity that, because of the missile issue, there might be fewer Chinese mass customers at first than expected,” said analyst Yoo Seung-man at HMC Investment & Securities, referring to non-VIPs. “But it’s Northeast Asia’s first such resort so it could draw customers that wouldn’t otherwise visit South Korea.”
South Korean casinos have benefited from Chinese policies for over two years, as a campaign against shows of wealth by public officials triggered an exodus of high rollers from Macau, China’s only legal casino hub.
But after South Korea secured land for its missile system in February, Chinese government officials gave travel agents a “7 point” verbal directive to cease tours to the country, showed a South Korean document seen by Reuters. Publicly, state media called for a boycott of all things South Korean.
Chinese visitors to South Korea subsequently fell 39% in March from a year earlier, after an 8% rise in January and February, South Korean data showed.
“There are concerns about the Chinese market,” Paradise said in a statement. “But we don’t expect the missile issue to continue in the long term.”
To lessen any blow at such a critical time, Paradise and Sega Sammy said they would also market Paradise City’s hotels, convention halls and other non-gaming amenities to South Koreans who cannot enter the casino — as most casinos in the country are foreigner-only.
A Paradise spokeswoman said the resort would also offer exclusive space for junkets to boost junket income, which it expects to make up 5-10% of initial casino revenue.