Caesars Entertainment has received initial approval – but not a definitive gaming license quite yet – for the construction of a $794.7 million casino complex near the country’s capital city of Seoul on Yeongjong Island, six miles from Incheon International Airport. The proposed property – which would include three hotel towers with 760 rooms, and would be Korea’s biggest casino complex – is a joint venture between Caesars, Hong Kong real estate developer Lippo Group and an unnamed Korean developer.
Aimed at Foreigners
The resort will be targeted specifically towards international tourists, according to the South Korean Ministry of Culture, Sport and Tourism – adding to the 16 foreigner-only casinos already in existence in the country. The decision can be seen as part of a recent trend of East Asian countries maximizing efforts to lure Chinese tourists to their shores. Chinese tourism has expanded greatly in recent years due to the emergence of a newly stable middle-class and a relaxation by the Chinese government on the restriction of movement for its citizens.
South Korea clearly hopes to tap into some of that newfound money, particularly in the light of the upcoming 2018 Winter Olympics in Pyeongchang. Recently, Malaysia’s Genting Group announced plans to build Resorts World Jeju, a $2.2 billion casino resort complex on the semi-autonomous Jeju Island, which is already a hub for Chinese tourists.
The Korea Tourism Organization says that by 2020, South Korea wants to attract 10 million Chinese visitors each year, an increase of 53 percent from 2012. Currently, the only place where South Korean citizens are allowed to gamble is in the Gangwon province in the east of the country, at the Kangwon Land Casino.
For Caesars Entertainment, the new casino represents necessary expansion into the Far East; Caesars is currently the only major Las Vegas casino chain without a presence in the gambling hub of Macau, an area that recorded $45.2 billion in gaming revenue in 2013 alone. And, while the ruling doesn’t guarantee that the new venture will receive a gambling license – that will need to be applied for separately and is dependent on certain investment conditions – it would be hard to see an impediment arising, given the governments’ preliminary approval and expected economic benefits to the area. Caesars said the construction of the resort alone would create “thousands of jobs”, and 3,500 permanent jobs upon completion.
“We are excited about the opportunity to expand our network and brands to Asia,” said Caesars CEO Gary Loveman, adding that agreements still need to be finalized among the joint-venture parties, and some third-party financing still needs to be found.
“Foreign visitation to South Korea has grown significantly, and we look forward to creating a world-class destination to further support Korea’s economic growth and tourism goals … We are grateful to the Korean government for their initial approval, paving the way for the opportunity to build and operate our first integrated resort in Korea.”
According to the proposal, along with a five-star hotel and casino, the resort would include a standalone convention center, a theater and other live entertainment venues, and retail attractions. The preliminary blueprint also includes the capability for further expansion in order to cater to a future increase in visitor numbers.
Presumably this news sits well with investors: shares in Caesars Entertainment on the Nasdaq Global Select were up 4.02 percent, closing at $24.87 earlier this week.
Wynn Resorts, MGM International and Las Vegas Sands Corp are also under consideration for South Korean gaming licenses.