Two faces of casinos
By Kim Tae-jong
Casinos here are either only for Koreans or only for non-Koreans. But this exclusive access is now making a huge difference, although people go there with the same hopes of hitting the jackpot.
Kangwon Land, the sole domestic casino complex accessible to Koreans, is always associated with negative images of corruption, bankruptcy, family breakdowns and gambling addiction. And it is under heavy government regulations, civic scrutiny and criticism by media.
But foreigner-only casinos draw totally different responses. They are considered tourist attractions and new sources to earn
Kangwon Land saw a decline in sales last year for the first time since its establishment in 2000. The casino was established in a move to help miners unable to make an income due to the closure of mines.
It posted 1.26 trillion won in sales last year, down 3.7 percent from the previous year, due to a drop in VIP guests.
“Our sales declined last year for the first time,” an official from Kangwon Land said. “We believe it was attributed to the decreased visits of VIP guests due to negative news reports about the casino and stricter regulations.”
After news report about some high-ranking government officials visiting the casino, many people are reluctant to go in fear that their visit may be made public, she said.
Kangwon Land has also gone through hard time due to various scandals.
The most recent one involved its staff who allegedly fixed card games, which led the casino to go through a police inspection and it had to shut down the facility for a day for the first time.
In contrast, the nation’s eight casinos for foreigners by two major operators Grand Leisure Korea (GKL) and Paradise Group have seen an increasing number of visitors each year and gained huge profits. Most importantly, they are free from ethical degradation.
GKL, 51 percent owned by the Korea Tourism Organization, now operates Seven Luck Casino at three places _ the Millennium Seoul Hilton in central Seoul, another in southern Seoul and a third in Busan.
“Basically, people have different views on us and Kangwon Land,” an official from GKL said. “They have a more positive image of us, like an exporter.”
Currently, thanks to “hallyu,” or Korean wave, there have been a growing number of foreign tourists here, especially from China and Japan. And they have emerged as a big contributor to foreigner-only casinos.
An official from the Millennium Seoul Hilton also said the casino has a positive impact on the hotel’s sales as guests also stay at the hotel and use its facilities.
“Definitely, the casino brings us benefits and serves as an attraction to the hotel,” the official said.
Paradise Group now runs five casinos, one each at the Sheraton Grande Walkerhill Hotel in eastern Seoul, the Hyatt Regency Hotel near Incheon International Airport, the Paradise Hotel in Busan, the Jeju Grand Hotel and the Lotte Hotel Jeju. It also operates a casino in Kenya.
Market insiders believe that foreigner-only casinos will post 9.4 percent annual growth with their combined sales soaring 10.8 percent each year, which recorded $830 million last year.
Such analysis has been already reflected in the share prices of the casino operators.
Shares of Kangwon Land increased 2.06 percent Friday to close at 24,750 won but it was a slight gain on a downward trend. The stock has stumbled in the past few months after hitting a high of 28,500 won on Feb. 7.
Meanwhile, GKL shares decreased 1.3 percent Friday to close at 18,500 won but it can as leveling off after its stock price has been on an upward trend since its bottom price of 18,500 won in Feb. 9.
Experts said GKL and Kangwon Land have different prospects due to their different target customers.
“GKL is expected to attract more customers with the increase in inbound tourists while Kangwon Land has already hit its peak,” said Han Seung-ho, an analyst from Shinyoung Securities.