What Korea needs to outrival Asian competitors in integrated resort industry

Korean traditional music band MeganDang performs during the grand opening ceremony of Mohegan Inspire Entertainment Resort in Incheon, March 5. Courtesy of Mohegan Inspire Entertainment Resort

Korea’s Ministry of Culture, Sports and Tourism granted Mohegan Inspire a license to operate a foreigner-only casino in January. It was the first time since 2005 that the government granted such permission and it was also the first license of its kind issued to a foreign investor.

“We expect the opening of Inspire resort to go beyond the mere addition of a casino business site in the country. Instead, it is expected to represent a significant milestone in Korea's culture and tourism industry,” Culture Minister Yu In-chon said in his congratulatory message.

However, while Korea has set an ambitious goal to attract 20 million inbound visitors and tourism revenue of $24.5 billion and has announced plans to foster the travel and tourism industry, it still lacks infrastructure that can link cultural high value-added tourism revenue.

According to experts, in order to develop Korean-style complex resorts and gain the upper hand in Asia's complex resort competition, Korea needs strategies that combine gaming regulations and leverage the growing popularity of K-culture to expand entertainment facilities.

A foreigner-only casino at Jeju Dream Tower integrated resort / Courtesy of Jeju Dream Tower

System to foster responsible gambling

Korea does not have a strict casino regulation or related regulatory organizations and has not been able to properly cope with gambling addiction and illegal gambling that the public is concerned about.

As a result, it has led to public distrust of casino management and acted as an obstacle to drawing social support for introducing integrated resorts.

Experts suggest that institutional maintenance, such as casino supervision that can be trusted by the public, must come first to foster a Korean integrated resort, and that innovation is needed to advance Korea’s supervisory system by benchmarking cases in neighboring countries, which control gambling addiction and illegal gaming issues effectively.

“In order to develop and foster integrated resorts as an industry, Korea needs to have a medium- to long-term development plan based on casino policies, with reference to those of other countries that run integrated resorts around us,” said Lee Hoon, a professor of tourism at Hanyang University.

Singapore has implemented responsible gambling strategies such as raising admission fees to restrict citizens’ indiscriminate access to casinos, banning the installation of ATMs in casinos and self-exclusion programs as part of its gambling addiction measures.

Meanwhile, Japan deeply addressed the process of legalizing casinos and introduced the Integrated Resort Maintenance Act that banned the installation of ATMs, restricted the number of each domestic visitor’s admission to three times per week and 10 times per four weeks, imposed an admission tax of 6,000 yen and prohibited the use of credit cards for purchasing casino chips.

Korea also needs a unified administrative body to regulate gaming, experts pointed out.

“For example, neighboring Singapore and the Philippines have supervisory bodies dedicated to casino management. Whether it is a committee or a department, a supervisory management body dedicated to supervising and fostering the casino industry is needed,” said Seo Won-seok, a professor at the College of Hotel and Tourism at Kyung Hee University, referring to the Macao Gaming Inspection and Coordination Bureau (DICJ), Singapore Gambling Regulatory Authority (GRA) and Philippine Amusement and Gaming Corp. (PAGCOR).

Also, Japan established the Japan Casino Regulatory Commission (JCRC) in January 2020 under the jurisdiction of the prime minister for casino regulation.

On the other hand, in the case of Korea, the National Gambling Control Committee, an administrative committee under the prime minister established in 2007, and the Ministry of Culture, Sports and Tourism are together in charge of management and supervision of the gaming industry.

The foreign-only casino at Mohegan Inspire Entertainment Resort in Incheon opened Feb. 3. Courtesy of Mohegan Inspire Entertainment Resort

The southern resort island of Jeju, which has eight foreigner-only casinos, has a dual structure with a separate supervisory authority under the municipal ordinance that governs casinos.

Experts highlighted a need to change the public’s negative sentiment toward casinos.

About half of Jeju residents believe that the island’s casinos contribute to increases in local crime and therefore more government regulation is necessary, according to a survey from January conducted by the Jeju Special Self-Governing Province with 1,000 islanders aged over 19.

Some 52 percent said the gambling facilities have negative environmental effects by creating waste, noise pollution and traffic congestion, while 55.1 percent thought the casinos pose harmful effects to teenagers and the educational environment. Only 13.7 percent disagreed.

“The most important point is to thoroughly come up with ways to solve the problems of gambling addiction. We need programs to reduce addiction while providing rehabilitation to most importantly reassure the public by strengthening responsible gambling strategies,” said Lee Choong-ki, a professor of hotel and tourism management at Kyung Hee University.

Korea’s gambling addiction rate stands around 5 percent, which is relatively higher than Singapore’s 1.2 percent, as of last year.

A digital show featuring sea life is displayed at Mohegan Inspire Entertainment Resort's Aurora, a 150-meter-long immersive digital entertainment street with giant LED screens, on Incheon's Yeongjong Island. Courtesy of Inspire Entertainment Resort

Developing non-gaming facilities

Experts also pointed out that integrated resorts can bring about synergy only when non-gaming tourism assets of the facilities are promoted jointly with casino regulation.

“In other words, a strategy to diversify tourism resources through tourism promotion is needed along with regulations by supervisory agencies for establishing a sound gaming culture,” Lee Choong-ki said.

For instance, the Singapore Tourism Authority is steadily developing tourism resources to lure foreign tourists back for repeat visits, such as the construction of the Botanical Gardens.

Macao is also focusing on developing various tourism resources such as entertainment, and restaurants while hosting various MICE and international events, while Japan stipulates that profits obtained through integrated resorts should be reinvested in the development of local tourism resources.

“Since Korea is a cultural powerhouse, Korea could bring K-content to differentiate its integrated resorts,” Seo said.

Lee Choong-ki mirrored Seo’s view, highlighting not only Korea’s music and drama but also food, history and culture, which have garnered international popularity, could root out differentiated content from those of Osaka and Singapore.

Korean band Nell performs during Asian Pop Festival 2024 at Paradise City in Incheon, June 22. The two-day festival that ran between June 22 and 23 featured live performances by 50 musicians from seven Asian countries and was joined by 10,000 guests in the audience. Courtesy of Paradise Cultural Foundation

According to domestic inbound tourism platform Creative Trip’s analysis of the number of transactions by foreign tourists visiting Korea during the first half of 2024, beauty and hair shops have ranked highly among the categories in which inbound visitors spend the most money.

The ways they seek to enjoy food culture has also grown similar to those of local Koreans, such as ordering delivery chicken and enjoying night and drinking culture.

Developing integrated resorts could contribute to luring Koreans from traveling abroad and channeling their tourism spending overseas, Lee pointed out.

“Koreans travel abroad a lot, so we need to build an infrastructure that can bring them back to Korea, which can be possible through developing integrated resorts,” Lee Choong-ki said.

According to the Bank of Korea and the Korea Tourism Organization, the travel account in the first half of this year was $6.48 billion, the largest deficit in six years since 2018’s $7.7 billion.

In the first half of this year, 14.02 million Koreans traveled abroad, which is 82.1 percent more than 7.7 million foreign tourists who visited Korea.

Terminal 1 of Incheon International Airport bustles with outbound travelers leaving for summer holidays, Aug. 4. Yonhap