Hong Kong conglomerate Chow Tai Fook Enterprises (CTFE) has inked a letter of intent to build a $1b casino in South Korea. The Korea Herald reported that CTFE was eyeing a space on Yeongjongdo Island in the Incheon Free Economic Zone (IFEZ), where two resort casino projects are already confirmed and two more besides CTFE’s may yet be inked.
CTFE is owned by Hong Kong’s fifth-richest man, 89-year-old Cheng Yu-tung, a former investor in Macau casino operator SJM Holdings. Cheng’s family also controls International Entertainment Corp, which acquired a 70% stake in Macau junket giant Suncity in January. (Suncity already controls some VIP rooms in South Korea.) CTFE is also awaiting word whether its joint venture with Australia’s Echo Entertainment will win the right to build a casino in Brisbane’s Queens Wharf development.
The IFEZ’s Lee Yoo-hyung said CTFE’s participation “will give a green light to the realization of the island’s dream of advancing to [become] a Las Vegas of Asia.” Lee said the IFEZ was attracting international investment due to the “rising number of Chinese visitors who have strong purchasing power.” The Korea Tourism Organization said the number of Chinese tourists was 4.68m in the first nine months of 2014, up 50% over the same period last year.
PARADISE CITY BREAKS GROUND
Paradise Sega Sammy, the joint venture of South Korea’s Paradise Group and Japan’s Sega Sammy Holdings, proudly broke ground on its Paradise City project (artist’s impression pictured) on Thursday, the first Yeongjongdo project to officially get underway.
Paradise City is targeting a July 2017 opening for what will be (for the moment) the biggest casino in the country, boasting 160 gaming tables. The rival joint venture of Caesars Entertainment and Indonesia’s Lippo Group isn’t expected to break ground on Yeongjongdo for another year and doesn’t expect to open its doors until 2018.
At Thursday’s groundbreaking ceremony, Paradise Sega Sammy CEO Choi Jong-Hwan told reporters the company would establish a “massive’ junket operation to ensure a steady stream of Chinese high rollers crossed the casino’s threshold. Even so, Choi suggested it would take a decade or more before Paradise City turned a profit, although that timeline could shrink if the government relaxed its ban on locals entering any casino not named Kangwon Land.
It’s been quite the week for South Korea’s casino industry. Earlier, Genting Hong Kong announced it was partnering with Landing International to establish a small casino inside the Hyatt Regency hotel on Jeju Island. Genting Singapore has tentative plans to partner with Landing on a $2.2b integrated resort on Jeju but the region’s new governor has thrown up some fresh roadblocks that are keeping the project on ice for the time being.
