Fears are rising in South Korea as Japan moves closer to opening its first integrated casino resort.
MGM Osaka is set to welcome players in 2030, and industry leaders in South Korea have warned that the country’s current regulatory framework will diminish the competitiveness of its casino and tourism sectors.
“Osaka’s integrated resort is geographically close and poses a serious competitive challenge for our industry,” said Choi Chul-kyu, acting Chief Executive of Kangwon Land, the country’s only casino open to Korean nationals.
Chul-kyu was speaking at an event hosted by the Korea Casino Integrate Resort Association and the Korea Tourism Society in Osaka, which brought together officials and experts to assess the impact of Japan’s new project.
Once the Osaka resort opens, reports suggest that approximately 7.6 million South Koreans could travel there annually, spending an estimated 2.6trn won (£1.4bn).
Currently, Koreans can only gamble at a small number of government-approved venues, such as a horse racing track in Seoul, the nation’s capital, and Kangwon Land, the only casino open to locals. The 17 other casinos present in Korea are exclusively open to foreign visitors.
Despite being bound by the same rules outside the country’s borders, data from the National Gambling Control Commission placed the value of overseas gambling by Korean nationals in 2017 was 4.9 trillion won (£2.7bn) – underpinning the appetite for casinos among Korea’s population.
The majority of money was wagered in the Asian gaming hubs of Macau and the Philippines, highlighting the level of income the Korean Government is missing out on each year.
MGM Osaka breaks ground
Japan began a new era for its gaming industry when it approved the MGM Osaka resort, located on Yumeshima Island, under the 2018 IR Law – which permits the development of up to three integrated resorts nationwide.
The resort is a joint venture between MGM Resorts International and Japan’s Orix Corporation, and is slated to cost ¥1.27 trillion (£6.4bn).
Alongside a casino, the planned facility will host three hotels, a convention centre, a theatre, restaurants and retail spaces.
Experts at the gathering called on the South Korean Government to recognise the importance of integrated resorts for boosting tourism to the country and bring its regulatory framework in line with other international markets.
“For Korea’s casino and tourism industries to take off, we need new policies that go beyond the current framework,” said Suh Won-seok, president of the Korea Tourism Society.
As planning begins, MGM Resorts must adhere to strict guidance in the development of the Ozaka IR that will be overseen by the Japan Casino Regulatory Commission (JCRC).
MGM must adhere to rules that the casino floor area to no more than 3% of the IR’s total floor space. The build of the resort must match the Osaka Prefecture highest guidance on environmental standards, energy efficiency, waste reduction and cultural alignment.
Thailand ends casino dreams
Integrated resorts have been on the agenda for many nations across Asia as the region’s regulatory landscape continues to evolve and countries seek new initiatives to boost tourism.
However, one country no longer welcoming the development is Thailand.
A draft bill to legalise casinos as part of integrated resorts in the country was withdrawn in July after Prime Minister Paetongtarn Shinawatra was suspended amid political unrest.
Any faint hopes of a reprieve for the bill were extinguished earlier this week as Thailand’s Constitutional Court voted for her removal.
Going forward, reports claim that the Bhumjaithai party, which has consistently voiced opposition to the gaming sector, has enough support from other parties to form a new government.
Therefore, it appears unlikely that a similar casino bill will see the light of day under the party’s prospective leadership.
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