NagaCorp, GKL pull out of Korea license auction

Hong Kong-listed NagaCorp and Grand Korea Leisure said they will not participate in a bidding process for one of two integrated resort licenses being offered by the South Korean government, due to concern about the economic viability of the projects.

A total of 34 groups had been in the running for the licenses, with the market seen as one of the most promising in the region in the absence of legislation permitting casinos in Japan.

NagaCorp issued a statement saying it will not be participating in the Request for Proposal issued by South Korea’s Ministry of Culture, Sports and Tourism for the development of an integrated resort around the Incheon area.

“The company is of the view that the expected economic returns of such an investment do not meet the company’s benchmark in evaluating return on investments and is therefore not in line with its policy of selective expansion.”

According to Union Gaming, Grand Korea Leisure said while releasing its 3Q earnings that it too would not participate. The Korean company, which is 51 percent owned by the Korea Tourism Organization, had been seen as a front-runner for a license.

Local media said the decision was based on Beijing’s ongoing crackdown on corruption, which has hit VIP gambling across Asia. The company has also not found a suitable joint venture partner.

South Korea bans gambling by locals, making the casinos highly reliant on visitors. Part of the prior optimism about the market had been based on the rising number of Chinese tourism arrivals.

“GKL pulling out of the RFP calls into question whether adequate returns can be generated given the RFP states a minimum investment of USD850 million (with winning bidders likely north of USD1 billion), that the casinos are only open to foreigners, and in the context of serious questions on the future of Chinese-originated VIP play,” Union Gaming said in a note.


More news from this jurisdiction

Hong Kong, South KoreaTuesday, Jan 17, 2017

Casino investor Landing International Development Ltd. is proposing to implement a ‘capital reorganization’, which will entail a capital reduction as well as a subdivision of the unissued share capital of the company.

South KoreaThursday, Jan 12, 2017

New Silkroad Culturaltainment Ltd has announced a name change for its casino at Jeju KAL Hotel, South Korea.

South KoreaWednesday, Jan 11, 2017

Hong Kong-listed Landing International Development Ltd has warned investors it expects to record an increase in net loss for the year ended December 31, 2016.

Japan, Vietnam, South KoreaThursday, Jan 05, 2017

Predictions for the 2017 Asian Gaming market could be precarious, but I speculate we will begin to see disruptive technologies migrate to the mainstream.

South KoreaThursday, Jan 05, 2017

South Korean casino operator Paradise Co. Ltd says casino revenue rose 6.2 percent in the full-year 2016, according to a filing from the firm to the Korea Exchange.

South KoreaWednesday, Jan 04, 2017

Hong Kong-listed Landing International Development has announced it is now the sole owner of the foreigner-only casino project in Jeju, South Korea.

South KoreaFriday, Dec 16, 2016

Landing International Development said its casino in the Hyatt Regency on South Korea’s Jeju Island has ranked first in the 2016 anti-money laundering assessment of 17 of the country’s casinos.