Kangwon Land, the only locals casino in South Korea, plans a massive expansion to fend off new competition.
Kangwon Land will add a new casino complex in a capital investment project worth KRW2.5 trillion (£2.4 billion/€2 billion/US$1.9 billion). Construction will begin this month with an expected completion date of 2032.
The expansion, approved by the South Korean government on 5 September, will increase the gaming floor by 40%, from 14,512sqm to 20,260sqm. It will grow the table inventory from 200 to 250 and add 250 new slot machines, for a total of 1,610.
Significantly, it will also raise the betting limits for foreign players from KRW300,000 to KRW300 million – a thousand-fold increase.
In a September note, Douglas Research said the regulatory changes will likely “result in higher sales and profits (and) higher valuation multiples”.
A hedge against competition
The Korean Economic Daily reports that visitation to the South Korea resort has been hampered by its remote location. Kangwon Land is located in the mountainous region of Gangwon Province, about 87km from Seoul.
The casino resort is also contending with a new rival. Mohegan Entertainment’s lavish Inspire Entertainment Resort opened in March near Incheon International Airport.
Operator Kangwon Land Inc is also looking for a hedge against future competition. MGM Resorts Japan is now developing a multibillion-dollar integrated resort in Osaka. MGM expects to open the complex on Yumeshima Island in 2030.
Looking to grow non-gaming revenue
In October, Kangwon Land interim CEO Choi Cheol-kyoo told the Korea Times that he wants the casino to be nothing less than the Las Vegas of South Korea.
“Just as Las Vegas transformed from a desert mining town into a global entertainment hub, Kangwon Land has the potential to transform from a former coal mining region,” he said. “Distance is no longer a barrier in today’s world and we aim to create a world-class destination here.”
To that end, the expansion will also add a hotel, a larger performance venue and an expanded retail corridor. It will triple the number of restaurants and introduce cultural and healthcare facilities.
“The goal is to create a completely new resort with constant performances, abundant attractions and a wide variety of dining options,” said the CEO. The operator expects the addition to boost foreign tourism and increase non-gaming revenue from 13% to 30% by 2032.
