Foreign casino gets gov’t approval
Yesterday, the Ministry of Culture, Sports and Tourism granted preliminary approval for a massive gambling resort to be built by a foreign joint venture called LOCZ on Yeongjong Island, Incheon.
Korea is trying to attract more tourism spending from heavy-pocketed punters - especially from China.
Under the investment plan submitted to the Tourism Ministry, the joint venture between U.S. casino giant Caesars Entertainment and Hong Kong-listed property developer Lippo plans to invest 2.3 trillion won ($2.15 billion) in constructing an integrated resort with luxury hotels, a casino exclusively for foreigners, shops and other auxiliary facilities.
The construction near Incheon International Airport will be carried out in three phases, with a deadline set for 2023.
The site belongs to the Incheon Free Economic Zone, a special district that is supposed to attract foreign capital for international businesses in fields like logistics.
The first phase of construction, which will cost 743.7 billion won, will begin at the end of this year. It will include hotels, a concert hall and conference halls and the casino, which is scheduled to open in April 2018.
In a second phase that runs from 2017 through 2020, LOCZ will build restaurants, residential areas and a shopping mall. The final phase, from 2020 to 2023, will be devoted to constructing a business hotel and completing the complex.
The ministry’s green light means that the major regulatory hurdle has been cleared. But it yesterday stressed that approval is preliminary and conditional.
The conditions outlined by the ministry include reporting audit results and using a single bank account to manage investment funds. If the operator violates one clause, the ministry says it will revoke the preliminary license.
“We will give full approval only when the venture carries out the project in accordance with the plan and government conditions,” said Kim Ki-hong, director of the tourism division at the ministry.
The authorities also advised the joint venture to recruit locals rather than foreigners as employees.
The ministry’s directions reflect the Park Geun-hye administration’s cautious approach to opening a foreign-run casino.
The idea of attracting foreign capital to build a casino-centered resort was initiated by former President Lee Myung-bak. The administration lowered the bar for submitting a bid in an attempt to interest as many foreign investors as possible.
But analysts say Park is not as enthusiastic as her predecessor about the project.
In June, the Tourism Ministry said that the LOCZ joint venture is unqualified to build the complex, citing weak finances and a low credit rating.
The LOCZ has improved its financial conditions since then and resubmitted its bid.
The Incheon Free Economic Zone Authority, which oversees the district, said the project would employ 8,000 people and generate 890 billion won in revenues annually.
It added that real estate prices in the area will get a boost.
BY PARK EUN-JEE [email@example.com]