They like to do things a little different in South Korea, but they generally get things right so it’s worth paying attention to the new trends and developments emerging from this economic and cultural powerhouse.
Recently the government of South Korea has been conducting a long and extended process to assess proposals for two new gaming licenses for casino operators in the country.
The gaming licences will be restricted to foreigneronly casinos (using the tried and tested Monaco method of attracting foreign currency into the country). For South Korea, the primary target market is gamblers from China. So far 34 casino proposals have been submitted. But what the South Korean government is looking for is not casinos as we perhaps traditionally think of them – instead they are looking for integrated resorts.
What is an integrated resort?
It’s clear that the South Korean government is looking for major developments. The minimum outlay for developers is one trillion Korean won (USD$850 million) and at least half of the funds invested must be from foreign investment – giving the major international gaming operators an open door into the South Korean market.
It is a deliberate strategy from the South Korean government who are seeking to attract foreign operators into the local gambling market. There is a widespread perception that domestic gambling operators don’t have the required experience in developing and operating the type of integrated resort that the government is looking for.
Looking at the specifications laid out by the government of South Korea, an integrated resort is a lot more than a big casino – it is a total holiday destination. The casino element is relatively small – limited to less than 5% of the total gross floor area of the resort. The resort is also required to have at least 1,000 fivestar hotel rooms; and 20,000 square metres of retail space.
Plus there has to be convention space, a themed attraction, as well as amenities in the areas of culture, entertainment, leisure, sports, health, food, and beverage. There’s going to be a lot going on in these integrated resorts.
When will the integrated resorts come online?
For a major construction project such as this, the delivery timelines are relatively tight. Once the winning bids have been announced the new resorts much be completed within fours years. On current timing this means that we should be seeing these integrated resorts opening around about 2020.
Where will the integrated resorts be located?
There are nine sites that have been preidentified as being suitable for the integrated resort proposals – five sites are on Yeongjon island (near to the country’s major airport); one in Incheon; and the other three within Busan, South Korea’s secondlargest city.
Will the integrated resorts be successful?
One of the real risks to the success of South Korea’s plans for these new integrated resorts is that they are relying on continuing demand from casino gamblers from China. The recent economic turmoil in China has already begun to impact the number of gambling tourists travelling from mainland China to Macau, so it will be interesting to see whether there is a sufficient rebound in demand from China to fill the massive entertainment complexes that are planned for construction in South Korea.
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