The new law allowing casinos on cruise ships flying the South Korean flag is meeting resistance from within the country’s government as well as opposition from land casinos with a vested interest in protecting their market, according to a report in Yonhap news today. Kangwon Land in remote Jeongseon is the only casino in the country that is allowed to host Korean citizens for gambling.
According to the report, local residents in Jeongseon, whose economy depends heavily on the casino, are planning mass protests if the government implements the casino cruise ship plan.
“The government established the casino that serves locals in the abandoned mining town for the special purpose of helping former miners and boost the local economy,” Kangwon Land CEO Hahm Seung-heui told a television audience Wednesday. “If [gambling] is banned on land, it should be banned at sea,” he said further, “If the government expands casinos to foster a certain industry, even hundreds of casinos will be not enough in this country.”
Proponents of the measure note that citizens already gamble on cruise ships flying foreign flags and the ministry pushing the new agenda assures detractors that there will be tough rules in place to protect citizen welfare.
The Yonhap report said that according to Maritime Minister Yoo Ki-june, Koreans would only be allowed to gamble for five or six hours and this, only while ships were in international waters, effectively nixing the argument for applying the land-based casino ban on gamblers at sea. He also told Yonhap that betting limits on a five day trip would be set below $100 per person.
“We will consult the culture ministry on the matter as there are concerns over gambling addiction. The plan cannot go ahead when there are many opposing voices,” Yoo told the news agency.
Kangwon Land Inc, (KRX:035250) posted net profits of KRW47.4 billion (US$42.7 million) for the final quarter of 2014, up nearly 70% from the same quarter for 2013. VIP revenues were up 34.1% while revenue from all divisions other than gaming fell slightly. Analysts had predicted 9% profit growth for the company in 2015 (over 2014). The company posted a 15% rise in gaming revenue for the first quarter. International visitor traffic, presumably VIPs, was up 10.9%.
Analysts note that casino action represents a significant portion of revenue for foreign cruise ship competitors, and suggest this is the reason the ministry is pushing to implement the law.
Yonhap quoted Lee Seon-ae, a leisure industry analyst at IBK Investment and Securities, “Challenges lie ahead for cruise casinos due to a lukewarm response from the culture ministry and strong opposition from residents in Gangwon Province.”