Paradise Sega Sammy break ground on $1.1b South Korea resort

Thursday 20th of November 2014

Paradise and Japan’s Sega Sammy have broken ground on a $1.1 billion integrated resort and casino complex in Yeongjongdo Island, Incheon.

The joint venture partnership expects to complete the foreigner-only property by July 2017. Paradise has a 55 percent stake in the firm, while the Japanese partner holds the remaining stake.

The resort will be located near Incheon International Airport and will boast 160 gaming tables.

According to media reports, the company plans to build an extensive junket operator network to bring in high rollers from China.

CEO Choi Jong-Hwan expects the resort to take at least a decade before it achieves its profit goals, but expects to have an advantage in being the first foreign-owned integrated resort to open.

Hong Kong-based Chow Tai Fook Enterprises has also expressed an interest in developing a project on Yeongjongdo and signed a letter of intent on Nov. 16 with Incheon City, while a venture between Caesars Entertainment and the Lippo Group plans a more than $2 billion integrated resort on the island.

South Korea’s government has warmed to the idea of IRs to help meet its goals to double tourism arrivals by 2017. However, locals are still banned from entering all except one of the country’s casinos making them highly reliant on visitors, in particular from China.

Standard Chartered in a recent research note said it expects the government to seek to create casino clusters with new casino licenses and that the island of Yeongjong will be one of them.

“We expect Yeongjong to be centre stage for IR development in Korea, which could expand into a major tourist destination in northeast Asia,” it said in the note.

On Thursday, Genting Hong Kong said it paid $117 million to invest in a casino venture on Jeju Island in the south of the country. Genting is teaming up with China’s Landing International Development to manage the casino in the Jeju Hyatt hotel. The two companies had also been planning a $2.2 billion IR on the island, though the project stalled after a change in local government.