* First-ever Korean casino resort to open in Q1 2017
* Shares up more than sevenfold since start of 2011
* Proximity to rich northeastern China a plus-exec
By Joyce Lee
SEOUL, Aug 6 South Korea's biggest casino
operator believes there is enough Chinese demand to go around
even as more Asian countries target mainland gamblers.
Paradise Co Ltd and Japanese partner Sega Sammy
Holdings Inc are set to break ground in October on the
country's first integrated casino resort.
Their Paradise City project near South Korea's main Incheon
airport should open in early 2017, a year ahead of a nearby
project planned by U.S.-based Caesars Entertainment Corp
and Hong Kong's Lippo Ltd.
The company is banking on South Korea's proximity to
northeast China and the popularity of Korean culture as a draw
for Chinese gamblers who bet billions in places like Macau.
The number of Chinese tourists to South Korea grew nearly 53
percent last year. South Korea's total casino revenue was about
$2.5 billion in 2013, less than 6 percent of Macau's.
"There will be more rich people in China, and they will need
to travel," Choi Jong-hwan, CEO of Paradise Sega Sammy Co, said
in an interview. "This is a megatrend."
Investors have sent Paradise shares up more than sevenfold
since the start of 2011, the year the Seoul-based company tied
up with Sega Sammy. Last month, Paradise raised 285.8 billion
won ($276.54 million) in a sale of treasury shares.
The joint venture plans to open the first phase of the
resort with casino, hotel, shopping, entertainment and
convention facilities, at a cost of about 1 trillion won.
The phase will include 120 tables, 400 slot machines and 300
electronic gaming tables, small by the standards of mega-resorts
Choi said the company will also rely on junket operators to
bring in 20-30 percent of its business, compared to the current
5 percent at its other casinos. Junket operators bring in
high-rollers from China.
The resort will also play up its "Korean-ness" because
"Korea is a hot place right now," Choi said. "The main content
that we will be showing to the Chinese VIPs will be Korean
culture," such as K-pop and local food, he said.
The conservative Korean culture at the moment has mostly
kept South Koreans from fully enjoying gambling. The country's
only "open" casino at which Koreans can gamble is in a remote
ex-mining town three hours from Seoul.
But the casino, operated by Kangwon Land Inc,
earned 1.28 trillion won ($1.24 billion) in revenue last year,
nearly equal the 1.37 trillion won earned in the country's 16
smaller foreigner-only casinos.
South Korea also faces potential competition from
neighbouring Japan, which may open the country to casino
gambling by 2020.
"Many of the Koreans will be travelling into Japan to play
the casinos and at that time, maybe the Korean government could
be thinking of putting in an 'open' casino," Choi said.
Choi said Paradise City is not planned with the expectation
that South Korea will eventually allow locals, but others say
they see little chance the socially conservative country will
ease the ban.
The relatively small size of the planned resorts is also a
drawback, said Seo Won-seok, a professor of hotel and tourism
management at Kyung Hee University.
"The integrated resorts planned for South Korea aren't
landmarks like Marina Bay Sands (in Singapore). These are small
resorts that won't be able to draw the crowd by their presence
alone," he said.
Others are hoping he's wrong. A consortium of Genting
Singapore Plc and Landing International Development
Ltd plans a $2.2 billion casino resort on Jeju Island,
a southern tourist spot popular with Chinese visitors, although
those plans have been slowed by local opposition.
Global operators like Las Vegas Sands and Melco
Crown have also expressed interest in South Korea, if
locals are allowed to gamble.
(1 US dollar = 1,033.50 Korean won)
(Additional reporting by Farah Master; Editing by Tony Munroe
and Matt Driskill)