Korea's Casinos Push for Lighter Rules as MGM Osaka Looms

South Korea's state-linked casino operators have urged the government to ease the administrative hurdles that delay their enhancement projects, and to actively promote world-class integrated resorts so the local industry can compete internationally. Executives from Grand Korea Leisure (GKL) and Kangwon Land made the case at a roundtable in Seoul hosted by The Korea Times.

The trigger is the opening of Japan's first integrated resort, the US$10 billion MGM Osaka, in 2030. Built by MGM Resorts and Orix on the man-made island of Yumeshima, about 90 minutes by air from Seoul, it is expected to draw business away from Korea's casinos on two fronts: Korean players who frequent Kangwon Land, the only domestic casino where locals may legally gamble, and the Japanese players who make up a significant share of customers at foreigner-only operators such as GKL, Paradise and Lotte Tour Development. Both companies are state-linked: the Korea Tourism Organization holds 51% of GKL, which runs the Seven Luck casinos, and Kangwon Land's largest shareholder is the state-owned Korea Mine Rehabilitation and Mineral Resources Corporation.

The incumbents, and how they are responding

Kangwon Land's 30.7% drop in net income came despite higher sales, pointing to margin pressure ahead of the Japanese opening. The company is already pursuing a large expansion: it has outlined a plan to invest KRW3 trillion (about US$1.9 billion) in transforming the wider resort area, including revamping walking trails, building a wellness center and developing a luxury pool villa, with a goal of doubling its non-gaming revenue share from 20% to 40% by getting visitors to stay longer. GKL, meanwhile, proposed earlier this year buying the site of one of its two Seoul casinos to cut rent and upgrade the property, but dropped the idea, saying it did not meet the requirements to pursue a feasibility study.

What the executives and academics asked for

GKL team leader Kim Eom-kwon said his company feels a "strong sense of crisis" because "the Japanese resort will draw a massive number of tourists away from Korea." He added: "While we are eager to upgrade our facilities to meet the rising expectations of visitors, we often face complex administrative hurdles. We hope for a regulatory environment that fosters growth and innovation rather than relying strictly on regulations."

Lee Dae-shin, head of Kangwon Land's casino strategy team, said the company must complete preliminary feasibility studies as a public enterprise before any new investment, a process that "can take several years," and called for "more streamlined administrative procedures" to compete. A colleague on the strategy team, Kim Ho-saeng, said that while the government focuses on K-culture to attract 30 million overseas tourists a year, "having a globally competitive integrated resort is an equally essential pillar," and urged greater state interest in the sector.

Academics at the roundtable pushed to change how casinos are seen in Korea. "We must transform our casinos from simple gaming venues into comprehensive entertainment destinations where visitors genuinely want to stay," said Lee Jae-seok, a professor at Kangwon National University. Lee Min-jae, board director of the Integrated Resort Tourism Research Center, added that local casinos already contribute to their communities "but the public image remains largely negative," and said the industry's financial contributions need to be used in ways residents can feel directly.

Precedent and outlook

The Korean operators have a direct precedent. When Singapore opened Marina Bay Sands and Resorts World Sentosa in 2010, the two resorts generated about $5.1 billion in gross gaming revenue in their first year and pushed Singapore past the Las Vegas Strip to become the world's second-largest gaming market behind Macau, while across the border Genting's Resorts World Genting in Malaysia reported a 3.6% fall in 2010 net profit as foreign visitors dropped.

Korea is not starting from zero. It already hosts integrated-resort-style properties including Paradise City and INSPIRE Entertainment Resort in Incheon, and Jeju Dream Tower and Jeju Shinhwa World on Jeju. For suppliers and affiliates working Asian-facing traffic, two developments follow: Korea may loosen its rules to defend market share before 2030, and Japan becomes a major new regulated gaming market from that year.