Union Gaming Research Macau Ltd., a prominent Macau-based equity research firm, released a note on Monday, saying that although some new international operators were given the nod to locate their casinos on the South Korean Jeju Island, the number of licensed gambling venues there might actually be reduced.
Last week, Genting Singapore PLC announced that the construction process of its Resorts World Jeju has begun. The operator is working in collaboration with Landing International Development Ltd. on the US$1.8-billion, which will be intended for foreign players only.
There are 16 foreigners-only gambling venues in South Korea and only one that allows residents of the country to enter its premises. Of those 16, 8 are located on the Jeju Island, as Union Gaming said in its note, they are way too small “by international standards”.
According to data, quoted by analysts Felicity Chiang and Grant Govertsen, each of the eight gambling venues have been featuring an average of 34 slot machines and 38 gaming tables as from 2013. What is more, the average gaming revenue amounted to a little less than US$26 million and the average number of visitors was 43,472 per year, which makes only about 120 visitors per venue per day.
Last year, a more thorough review of the state of Jeju’s gaming was announced by Won Hee-ryong, who is currently taking the position of governor of the island. According to the Union Gaming team, Mr. Won would prefer fewer integrated resorts with casino venues on the island. Yet, they need to be of the highest possible quality and built in a manner that meets all the necessary international standards.
At present, some of Jeju’s casinos are notorious for the relatively poor quality of service. What is more, the Chinese government considers them inappropriate for China’s residents. This, in turn, might lead to a decrease in the number of Chinese players.
Yet, as it was suggested in the yesterday’s note, the construction of top-class resorts and casinos might attract more players from Mainland China. Union Gaming’s experts pointed to the fact that Jeju is only a short flight away from China and residents of the country can travel to the island without having to be issued a visa for the purpose.
Last year, approximately 6.1 million Chinese residents traveled to South Korea and they accounted for almost 43% of all the 14.2 million tourists who entered the country.
According to Union Gaming’s note, 2.8 million Chinese went to Jeju in 2014. The research house’s experts claimed that these visitors can be considered representatives of mass market. And as previously mentioned, Beijing is currently trying to deter only VIP players from gambling abroad, which means that mass players can seriously boost Jeju’s economy and that of South Korea, as a whole.
