February 23, 2018 by

South Korea Seeks Windfall from Gambling Activity of Guests

The latest installment in the ongoing story regarding the legality of land based and/or online casinos in different jurisdictions is the news that South Korea is gravitating to the Integrated Resort concept initiated by Singapore and copied in several other Far East nations.

Much More than a Casino

The Integrated Resort is basically a rounded area of convention centers, restaurants, theaters and other entertainment venues, family-oriented attractions, shopping areas, and hotels, with a casino as one of the attractions.  The idea was to meld casinos with more “respectable” enterprises thus making the casino part of a complex that would attract non-gamblers as well as gamblers.

Keeping Gambling Responsible

The concept also was initiated as a way to make responsible gambling more likely as anyone who came to the Integrated Resort for a conference would, theoretically, have only a short amount of free time for gambling.  Similarly, families might come for the family attractions leaving mom and dad just a little time to gamble after the kids were asleep.  Anyone coming to the shopping areas to shop would, likewise, have just a little time to gamble.

The desire in Singapore and elsewhere was to reap the tax benefits of gambling while maintaining a sort of built in responsible gambling atmosphere.  The Singaporeans understood that, as lucrative as gambling can be for a local economy, problem gambling is very bad.  So they prefer that people play free games online rather than play for real money at a land based casino if that would lead to problem gambling.

After the Olympics, What to Do?

The Winter Olympics will soon end in Pyeongchang and the South Korean faces the tax of converting the Olympic village into something that can return enough of the investment to make it profitable.  So, South Korea has announced its intentions of adding a casino to the Olympic village complex.  With so many other uses for the facilities in the Olympic complex, the casino will likely be at best a secondary or tertiary destination for South Koreans and visitors alike.

The Olympic village was built around an existing ski lodge and summertime water park.  Those will stay and to them the Integrated Resort will be added.  Thus, the converted Olympic village will become an Integrated Resort almost immediately.

Restrictions to Citizens

Along with the announcement regarding the future of the Olympic village, it turns out that the casino will be off limits to South Koreans.  Foreign guests will be asked to show their passports upon entering the casino and South Koreans will be denied entry.

Of the 23 land based casinos in South Korea only one allows entry to South Koreans—the Kangwon Casino located about 55 miles from Pyeongchang.  As small as South Korea is, the location of the Kangwon Casino and Hotel are said to be in a remote mining area that is somewhat difficult for South Koreans to get to.

This was done by design as the South Korean government prefers to benefit from the gambling practices of foreign guests but tries to discourage locals from gambling on casino games.

Some Legal Gambling

Gambling is not prohibited in South Korea generally.  There are legal lotteries, and three legal types of races that residents can gamble on: motorcycle races, boat races, and horse races.  But South Koreans, by law are not permitted to gamble at casinos even when they are abroad.  The lone exception remains and is planned to remain the Kangwon Casino.

The South Korean governments looks to the travel records of their citizens to see if there are more than a normal number of trips to places known for their casinos such as Monte Carlo, Macao, Atlantic City, or Las Vegas.  On of the corollary effects of the Integrated Resort concept is that a South Korean might travel to Singapore, or to any other venue where there is an Integrated Resort, for a conference or business meeting and spend some time gambling at the resort’s casino and the South Korean government would have no idea that he or she did so.

Desire to Attract Foreign Gamblers

As much as the South Korean government sees gambling as problematic and allows a highly regulated small set of legal gambling opportunities for South Koreans, the government is looking for ways to reap some financial benefits from the gambling propensities of guests.

The first priority is to encourage foreign investment in South Korea.  Casinos are an attractive investment but the South Korean government is leery of the negative side of gambling despite the 23 land based casinos now allowed and the other legal gambling avenues open to the public.  This is where the idea of an Integrated Resort comes in.

Much of the infrastructure is already in place in the Olympic village.  Thus, it would take far less foreign capital to turn it into an Integrated Resort over the cost that would obtain were an investor to start from the very beginning.

The Integrated Resort is also seen as a way to reduce problem gambling.  The Korea Center on Gambling Problems, set up in 2012, claims that the incidence of problem gambling in South Korea may be three times as high as in other developed countries.  This claim is disputed as the study may not have been performed in accordance with strict scientific and statistical methods.  Nevertheless, it reflects the government’s concern for the power of gambling.