• Thu
  • Aug 28, 2014
  • Updated: 11:05am
BusinessCompanies
GAMING

Regional countries eye share of booming gaming industry

Lippo's casino joint venture in South Korea points to emerging desire for a share of market that has flourished in Macau and Singapore

PUBLISHED : Friday, 01 February, 2013, 12:00am
UPDATED : Friday, 01 February, 2013, 5:23am

Investment group Lippo announced last week plans to build a hotel complex in South Korea with casino floors, reflecting the desire of countries in the region to grab a share of Asia's fast-growing gaming industry.

In Macau, the world's largest gaming destination, the casino industry recorded gross gaming revenue of 304.1 billion patacas last year, up 13.5 per cent from 2011.

Although growth is slowing - the industry grew 42.2 per cent in 2011 - it is expected to continue, supported by a strong mass market instead of the high-rolling VIP segment.

All six gaming licence holders in Macau are developing or planning to build facilities to attract more visitors.

Singapore, another major regional gaming hub, has developed a flourishing casino industry with gross revenue in excess of US$6 billion a year from two casinos - Resorts World and Marina Bay Sands - according to Britain-based Global Betting and Gaming Consultants (GBGC).

"We would expect that to increase to US$6.4 billion by 2013, which is significant compared to the US$6.05 billion of gross gaming yield from all the casinos on the Las Vegas Strip," GBGC chief executive Warwick Bartlett said.

Several countries, including Vietnam and Cambodia, have been trying to develop a gaming industry to help their economies.

Even in secretive North Korea, as early as 1999, Hong Kong businessman Albert Yeung Sau-shing's Emperor Group opened a hotel-casino project in the Rason special economic zone. Operational details are not available as the assets are not included in the listed company's accounts, according to a spokeswoman who declined to be named.

In July last year, the residents of the tiny island of Matsu, off Taiwan, voted for the construction of a casino resort.

Japan, faced with an unpromising economic outlook, has discussed establishing principles for the development of integrated resorts as internationally competitive and attractive destinations.

Bartlett said the emergence of plans for casinos in the region was attributable to a great degree to China, where a wealthy middle class is growing.

"The Chinese customer is clearly important, and the success of Macau demonstrates that," he said.

Emperor Securities analyst Chelsey Tam said for the Lippo complex, South Korea's proximity to northeast China and Japan might entice gamblers.

South Korea's government announced in July last year that a US$290 billion project called 8City would be built near Incheon airport.

The huge project is called 8City because the number eight sounds like wealth in Chinese.

"In fact, the 8City project is quite interesting - three times bigger than Macau, with casinos, hotels, shopping malls, theme parks, car racing tracks, ski slopes and a marina," Tam said.

But analysts do not think Macau's leading position is under threat by its emerging rivals.

"The Korean 8City complex won't be a threat to Macau in the short run, as it is scheduled to open in 2030," Tam said.

Bartlett said he believed Macau was one of the most secure gaming markets in the world.

"It is difficult to find anything negative about the prospects for Macau," he said.

"Access is to be improved through the new bridge, and many Chinese citizens have yet to visit Macau, so whatever competition comes along, Macau will be fine."

Lippo has a 20 per cent stake in the South Korean project; US casino giant Caesars Entertainment, which will build and operate the casino, has 40 per cent; and another partner has the remainder.

Bartlett said the project would be welcome news to Caesars shareholders.

"Caesars has been desperate to get into Asia and has so far been left behind by Wynn, MGM and Las Vegas Sands," he said.

"The investment by Caesars is interesting, because so far they have no assets of significance in Asia. They have been left behind, and this investment would correct that."

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or