- South Korea’s first casino resort affected by planned anti-North Korea defences
- China’s boycott in protest prevents Chinese high rollers visiting
When opening a new casino, owners plan for every eventuality. But being overtaken by world politics isn’t something any business can prepare for. Just as it prepared for its grand opening this week, the first casino resort to be built in South Korea has had the misfortune to coincide with a major diplomatic incident.
The casino is a joint venture between Paradise Co Ltd, the biggest casino operator in South Korea, and the Japanese firm Sega Sammy Holdings inc (developer of slot machine games) and is scheduled to open today, Thursday April 20.
The luxurious new resort is just five minutes by car from the Incheon International Airport in Seoul. And from there to China across the Yellow Sea it is 329 kilometres.
And that proximity to China is considered paramount as, historically, around half of South Korean casino revenues that comes from non-Korean gamblers is made up of Chinese visitors, thus making it a very significant target market. Most casinos in South Korea can only give access to foreign gamblers.
Missile defence site
However, all of this was until two months ago, when the South Korean government allocated land not far from Seoul to be used for a missile defence site. In line with escalating political tensions in the region, the site is reported to be aimed at protecting the country from any threat from North Korea.
In an apparent act of retaliation, the Chinese government banned travel agents in China from selling any South Korean tours. This particularly hurts gambling revenues as the country has been benefiting over the last two years from a change in Chinese policy – a government campaign against public officials showing off any wealth has pushed them in the peninsula’s direction as gamblers leave Macau, which is the only part of China where casinos are legal.
Casino owners turn to new markets
The Chinese ban has had a clear impact on the market already. It’s been reported that visitor numbers from the country to South Korea dropped by 39% last month over the previous year’s figures. At the same time, Macau saw its overall gaming revenue rise by 18% in the same month.
Paradise doesn’t expect the diplomatic issue to remain in the long term. However, both companies have already put in place plans to offset the possible drop in customer numbers with a sizeable marketing campaign targeting Japanese visitors and gamblers from South East Asia.
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