S Korea approves foreign-owned casino to lure Chinese tourists

South Korea has approved construction of its first foreign-owned casino as the country tries to emulate Macau and Singapore in attracting more gamblers from mainland China.

The casino, a joint venture between Las Vegas-based Caesars Entertainment and Lippo, a Hong Kong-listed property developer, would be built near the Incheon International Airport west of Seoul, Korea's tourism ministry said yesterday. The ministry granted preliminary approval for the first part of the project that will also include hotels and shopping centres.

The decision to allow foreign operators to compete against Korea's existing 17 casinos comes after President Park Geun-hye pledged to bolster service industries to boost growth and reduce the country's dependence on exports.

Tourists from mainland China make up more than a third of visitors to Korea, where Japan's Sega Sammy and casino operator Genting Singapore are also seeking licences to build.

"Korea is the optimal location to draw Chinese gamblers," said Song Hak-jun, a professor at the hotel and convention management department at Pai Chai University in Daejon, Korea. "Everyone is competing to absorb China's outbound tourist demand. Having casino resorts will bring initial explosive growth to Korea, too."

Korea plans to draw 10 million visitors from mainland China a year by 2020, compared with 4.3 million last year, according to data from the Korea Tourism Organisation. Mainland Chinese tourists made up 36 per cent of foreign visitors to Korea last year, and accounted for 41 per cent of visits to the country's casinos in 2012, the latest official data showed.

Only one of Korea's 17 casinos is open to Koreans. Their combined revenue was 2.46 trillion won (HK$17.8 billion) in 2012, when they attracted 5.4 million gamblers. Revenue at foreign-only casinos grew by an average of 15 per cent a year in the five years to 2012.