By Lee Hyo-sik
Chinese investment in Jeju Island's casino industry has surged over the past year in response to the increasing number of Chinese tourists there.
Of the eight foreigner-only casinos operating on the island, one has already been acquired by a Chinese leisure company, and the management of the other two is influenced by businesses or individuals from China.
Officials at the Jeju Special Self-Governing Provincial Government expect the trend will likely accelerate, expressing concerns that all eight casinos could be taken over by Chinese or other foreign capital.
According to the provincial government and an online disclosure system run by the Financial Supervisory Service, Monday, Grand Express Korea, a joint venture between Hong Kong-based Landing International Development and Genting Hong Kong, acquired a casino at the Hyatt Hotel Jeju in June last year. The casino was then renamed Genting Jeju Casino.
Genting Hong Kong is a subsidiary of the Malaysian conglomerate Genting Group.
Both Landing and Genting are constructing a multi-million dollar resort complex on Jeju Island, which is scheduled to open in 2018. The facility is expected to cater to largely Chinese tourists when it opens.
In addition, Blackstone Resorts, a local golf course and hotel operator, has acquired a 52.5 percent stake in Golden Beach Casino at the Jeju KAL Hotel for 36 billion won ($34 million).
Industry insiders speculate that Blackstone, which has suffered huge losses over the years, received funds from Macrolink Real Estate, a Chinese real estate developer. In 2014, Blackstone said it would build a resort complex on the island with Macrolink.
An owner of a casino operating at the Ramada Plaza Hotel Jeju reportedly sold a 30 percent stake to an unidentified Chinese national.
Besides Chinese capital, Bloomberry Resorts from the Philippines acquired The LVegas Casino at THE Hotel in March.
"We have closely been monitoring what's been happening in the Jeju casino industry," said an official at the Jeju provincial government's casino supervisory team. "The Ministry of Culture, Sports and Tourism supervises casinos inland, but we have authority to oversee casinos on Jeju. We are increasingly concerned about small-scale casinos being taken over by Chinese capital."
The official said all eight casinos on the island are vulnerable to hostile takeovers so that many could be acquired by Chinese companies or individuals in the near future.
"However, there is nothing we can do about it because the dealings take place between private entities," he said. "What we will do is to strengthen the supervision of casinos to increase their management transparency and nurture the industry as Jeju's new cash cow."
In December, the provincial government forwarded an ordinance to the local council for approval, which is designed to make the operation of casinos more transparent by establishing a separate supervisory body. But council members have not yet dealt with it.
"We really hope that the provincial assembly passes the ordinance as soon as possible so that we can tighten our grip on casinos," the official said. "In addition, the National Assembly should pass a revised Tourism Promotion Act, which will require those acquiring casinos to get approval from the government and renew their licenses every three years."
Chinese investment in Jeju Island's casino industry has surged over the past year in response to the increasing number of Chinese tourists there.
Of the eight foreigner-only casinos operating on the island, one has already been acquired by a Chinese leisure company, and the management of the other two is influenced by businesses or individuals from China.
Officials at the Jeju Special Self-Governing Provincial Government expect the trend will likely accelerate, expressing concerns that all eight casinos could be taken over by Chinese or other foreign capital.
According to the provincial government and an online disclosure system run by the Financial Supervisory Service, Monday, Grand Express Korea, a joint venture between Hong Kong-based Landing International Development and Genting Hong Kong, acquired a casino at the Hyatt Hotel Jeju in June last year. The casino was then renamed Genting Jeju Casino.
Genting Hong Kong is a subsidiary of the Malaysian conglomerate Genting Group.
Both Landing and Genting are constructing a multi-million dollar resort complex on Jeju Island, which is scheduled to open in 2018. The facility is expected to cater to largely Chinese tourists when it opens.
In addition, Blackstone Resorts, a local golf course and hotel operator, has acquired a 52.5 percent stake in Golden Beach Casino at the Jeju KAL Hotel for 36 billion won ($34 million).
Industry insiders speculate that Blackstone, which has suffered huge losses over the years, received funds from Macrolink Real Estate, a Chinese real estate developer. In 2014, Blackstone said it would build a resort complex on the island with Macrolink.
An owner of a casino operating at the Ramada Plaza Hotel Jeju reportedly sold a 30 percent stake to an unidentified Chinese national.
Besides Chinese capital, Bloomberry Resorts from the Philippines acquired The LVegas Casino at THE Hotel in March.
"We have closely been monitoring what's been happening in the Jeju casino industry," said an official at the Jeju provincial government's casino supervisory team. "The Ministry of Culture, Sports and Tourism supervises casinos inland, but we have authority to oversee casinos on Jeju. We are increasingly concerned about small-scale casinos being taken over by Chinese capital."
The official said all eight casinos on the island are vulnerable to hostile takeovers so that many could be acquired by Chinese companies or individuals in the near future.
"However, there is nothing we can do about it because the dealings take place between private entities," he said. "What we will do is to strengthen the supervision of casinos to increase their management transparency and nurture the industry as Jeju's new cash cow."
In December, the provincial government forwarded an ordinance to the local council for approval, which is designed to make the operation of casinos more transparent by establishing a separate supervisory body. But council members have not yet dealt with it.
"We really hope that the provincial assembly passes the ordinance as soon as possible so that we can tighten our grip on casinos," the official said. "In addition, the National Assembly should pass a revised Tourism Promotion Act, which will require those acquiring casinos to get approval from the government and renew their licenses every three years."
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