The competition for South Korea’s remaining two casino licenses is heating up.
A JP Morgan Securities note issued this week said South Korea plans to select “around two” potential sites for integrated resort projects sometime in August, after which companies would be required to submit full proposals by November. The applicants would learn their fate before the end of this year.
Local media reported that the Ministry of Culture, Sports and Tourism had received 34 proposals for the two remaining licenses. The eager wannabes are said to include familiar names like South Korea’s Grand Korea Leisure, Macau’s Galaxy Entertainment Group, Cambodia’s NagaCorp, leading junket operator SunCity Group, Connecticut’s Mohegan Sun, those Saipan dilettantes Imperial Pacific International Holdings and Bill Weidner’s Global Gaming Asset Management.
Few of the applicants have been all that publicly forthcoming with specifics on their proposals, but most are believed to be eyeing areas already targeted for casino expansion, such as Incheon. But Galaxy is believed to be eyeing a property in Goyang, closer to Seoul, while the tandem of Lotte Group and Genting Group is believed to be eyeing a location in the port city of Busan (an area also favored by Las Vegas Sands, but only if locals are allowed in, which isn’t likely to happen).
PARADISE CO LTD REVENUE PLUNGES BY MORE THAN HALF IN JUNE
Meanwhile, the 16 foreigners-only casinos already open for business in South Korea are taking a pounding, due in part to the recent outbreak of Middle East Respiratory Syndrome (MERS). Since the first case was diagnosed in May, some 33 people have died and nearly 200 had been confirmed as suffering from the infectious disease.
The MERS scare reportedly caused South Korea’s international visitor numbers to fall by one-fifth in the month of June. Compounding matters, last month saw Chinese authorities arrest 14 South Korean nationals who were in the country promoting trips to South Korean casinos. In February, a top official at China’s Ministry of Public Security had publicly warned other Asian nations to stop encouraging its citizens to visit foreign casinos.
Casino operator Paradise Co Ltd revealed this week that its revenue in the first half of 2015 fell 14% from the same period last year. Paradise had already reported a sharp VIP downturn in Q1 but the trend is accelerating dramatically, with June’s sales down more than 50% year-on-year and down nearly two-thirds from the previous month. Table game turnover was down 21.9% in H1 and June’s table drop was off 49.7% from May’s total. Meanwhile, nervous Paradise execs scan the sky for descending swarms of locusts…