Casinos return to limelight

Foreign tourists gamble at the Seven Luck Casino in the Millennium Seoul Hilton in this undated file photo. The government is considering easing rules on foreigner-only casinos to reinvigorate the slumping domestic economy by pursuing foreign investment. (Photo : The Korea Times)

Gov’t mulls easing rules to bolster economy

Speaking of the positive sides to casinos has been a taboo subject in presidential meetings over the past four years.

Though it was obvious that gambling business will help lure foreign investors and travelers, President Lee Myung-bak, a devoted Christian, had been opposed to casinos, expressing fears of dismal ramifications that could cause an increase in gambling addiction and an escalation of associated criminal schemes.

Rumors have it that a global casino mogul withheld a multi-billion dollar investment plan to build an integrated resort, including a casino, in the southern part of the country after facing opposition from the President.

With his five-year term expiring in six months, however, he is no longer trapped in his own dogma. Surprisingly, he is now a vocal preacher of casino and fighting in the frontline to eliminate what he now portrays as red tape and cumbersome administrative steps preventing the advancement of casino businesses.

The dramatic turnaround comes as the country faces a prolonged slump, indicating that the businessman-turned-state leader is looking to reinvigorate the domestic economy with foreign capital.

There are 17 casinos in Korea — 16 are open exclusively to foreigners and Kangwon Land in Jeongseon, Gangwon Province, is the only one that allows local people to enter.

To put another spin on the surprising about-face, Lee even scolded ministers for being slow in revising regulations friendly to casino investors during a recent meeting on economic policies.

“Check all things that need to be changed and handle them properly in the next one and two months,” Lee was quoted as saying by his spokesman in the meeting on July 21.

An official at the Ministry of Culture, Sports and Tourism said the core reason of the criticism was sluggish implementation of a set of agreements reached during a meeting in April. The instruction galvanized cultural and other relevant state bodies, and bore first fruits within a week.

The Ministry of Knowledge Economy said on July 29 that it’s considering legal changes to make it easier for overseas investors to open foreign run casinos in the country’s free economic zones.

Current laws require foreign investors to make an investment of at least $300 million up front to build a hotel or convention center in a free economic zone before seeking permission to open a casino.

The ministry said it will rewrite the rules to allow foreign investors to apply for casino approval after paying a deposit of $50 million to the Ministry of Culture, Sports and Tourism. The tourism ministry will have 60 days to decide whether to license an investor or not. A licensed candidate will be required to make an additional investment worth $250 million to secure permanent approval, the economy ministry explained. Approval could be withheld should the foreign casino operator break the mandatory commitment of making an additional investment worth $500 million during the first two years of operation, it added.

“This is to boost inbound investment,” a ministry official said. “The existing law has drawn a flurry of complaints from overseas investors, particularly those who know about the potential of the country’s casino business.”

The government unveiled another deregulation plan for the casino business on Aug. 7.The Ministry of Strategy and Finance said it will revise the rule to make it possible for 20,000-ton or lighter passenger ships to install foreigner-only casinos. Currently, such gambling facilities are allowed on boats heavier than 20,000-tons.

“Japan and Hong Kong allow casino operators greater freedom. This revision will enhance domestic operators’ competitiveness to the level of their competitors in the two nations,” a finance ministry official said. Finance Minister Bahk Jae-wan said his ministry will try to complete the revision as early as possible.

Municipal governments try to benefit from the policy shift.

Incheon, the country’s second largest port city some 50 kilometers west of Seoul, said last week that it will build several multifunctional resorts, including a casino, on Yeongjong Island by 2015. Incheon International Airport is located on the island.

The Incheon Free Economic Zone said the city is now engaged in last-minute talks over the development with two foreign investors — Universal Entertainment of Japan and Caesars Entertainment of the United States — and Korea’s Paradise Group.

City officials said the President’s stance gave great impetus to push forward with the project, drafted five years ago.

“Our talks with the investors remain fruitless for the past five years due to tough regulations. But the President’s move has led to a rapid change, making the negotiation quickly develop,” an Incheon official said.

The official said Universal Entertainment has already invested $110 million and will more to run an integrated resort starting 2015. It will invest 2.7 trillion won ($2.38 billion) additionally to build casino and hotel by 2017.

Caesars Entertainment will spend $750 million during the first phase of investment on the island by 2015. <The Korea TImes/Park Si-soo>

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