Not so long ago the government in South Korea cracked down on the amusement arcades amidst a corruption scandal involving people in high places. Out went the popular Pada Iyaga slot machines and virtual horse racing games in the country where legally the only place Koreans may gamble is the Kangwon Land resort – all other casinos are foreigners only.

Kangwon Land has just announced that the biggest dividend ever is expected to be paid following sales that should top 1 trillion won (US$1.07 billion) for the first time – which may or may not have something to do with the closure of other gambling locations. Although Kangwon Land is an integrated casino resort, with ski slopes, water parks, golf courses and hotels, most of the revenue comes from its casino operation.

According to CEO Cho Ki-song a plan to expand non-casino business should attract an average 5 million tourists annually by 2010. However, he added that the government needs to ease restrictions on gambling and that the negative views on casinos should be overcome in order to offset the rising tourist deficit. Back in 2004 it seemed that the government was intent on making Korea a major casino destination but Cho says Korea’s casino industry is over regulated compared to other countries and at present cannot compete.

``If you look at the Kangwon resorts from a global perspective, it is not yet suitable in servicing foreign guests,'' he stated. Cho commented that it is time to transform Kangwon Land into a family resort with a variety of entertainment serices. To this end the company is to invest 42.5 billion won (US$45.8 million) in a water park and spas as well as billions in extending the highway infrastructure to the resort and building new condos and hotels.

Cho is worried that more Koreans will go abroad to gamble if the government does not change its policy. He points out that Singapore is investing over 7 trillion won in developing casino resorts. At a press briefing the company’s Chief Financial Officer Ko Byoung-soon said that after organic and capital growth in Korea it has plans to enter the Vietnamese, Cambodian and Mongolian markets. (E-11.27.07)

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