Paradise hopes Winter Olympics thaws South Korea-China ties
Country's first Vegas-style casino resort faces tough competition
KIM JAEWON, Nikkei staff writer
INCHEON, South Korea -- Paradise Group Chairman Philip Chun said Thursday its newly opened integrated casino resort would be affected by political tensions between South Korea and China, but he hoped the 2018 PyeongChang Winter Olympics would help mend relations.
The foreigner-only casino resort, Paradise City, opened on Thursday in the western port city, five minutes from Incheon International Airport, the nation's main gateway. The 1.3 trillion won ($1.14 billion) project was jointly funded by South Korean casino operator Paradise and Japanese game machine maker Sega Sammy Holdings.
"Tensions over THAAD will not be eased in the short term. We are approaching this matter with a conservative perspective," said Chun in a press conference, referring to the deployment of a U.S. anti-missile system, or Terminal High Altitude Area Defense, in Seongju. "But I wish Chinese athletes and tourists will join the 2018 Winter Olympics, paving the way for communication and cultural exchanges."
China in March banned tour groups from visiting South Korea in protest against the THAAD deployment. Paradise has been relying on Chinese high-rollers in its five casino operations. But in the fourth quarter, Japanese high-stake gamblers accounted for 38% of the total at Paradise's five casinos, overtaking Chinese ones who made 35%, according to Daiwa Capital Markets.
Chun said that the company would continue to strive to attract customers from other Asian countries. "Now we keep our eyes on Japan and Southeast Asian countries, such as Vietnam, Thailand, Indonesia, Malaysia and Hong Kong," Chun said. "We have been heavily relying on China but we will make new markets."
Even if political tensions with China ease, analysts say Paradise will face tough competition from Japan and Russia as well as the traditional gambling powerhouse of Macau.
"Competition for northern Chinese players will remain intense for the foreseeable future with Japan recently legalizing casinos and Vladivostok's Tigre de Cristal planning a $500 million expansion," said Fitch Ratings in a report. "In addition, more properties and infrastructure are set to open in Macau."
Paradise shares dropped 3.33% over the last two days, erasing some of its 6% gains on Monday and Tuesday. The benchmark Kospi rose 0.5% to 2,149.15 on Thursday.