[Courtesy of KCC Inspire Resort]
A high-profile project to build a world-class casino resort near South Korea's main international airport is up in the air after a key foreign investor said it was not interested in any gaming aspect.
In 2014, Lippo, an Indonesian real estate development group, formed a consortium with its US partner Caesars Entertainment to build an integrated resort near Incheon International Airport on Yeongjong Island west of Seoul, by putting up 2.3 trillion (1.97 billion US dollars) in construction costs by 2023.
It was part of South Korea's ambitious drive to transform the reclaimed island into its own version of Las Vegas, aimed at attracting more Chinese tourists. Two more consortiums have been allowed to build casino resorts on the island.
But in a recent filing with the Hong Kong stock Exchange, Lippo said it was in negotiations with Caesars over a possible sale of its stake in their planned resort project in South Korea.
"In light of the current outlook for the gaming industry in North Asia and the volatility of the global economy, the group is in discussions with Caesars for some alternatives which may include the possibility for a third party investor to acquire the group's interest in the project," Lippo said.
Lippo indicated they may participate at some level in the development but said it has no interest in any gaming aspect. "The company has no interest in participating in any gaming aspect of the project in any event."
The consortium's initial plan includes the construction of a gambling place, larger than any other foreigner-only casinos in South Korea, by April 2018.
The Seoul government has set tough conditions for casino projects, including an annual accounting audit and a clear plan for job creation.
On the island, Paradise, a casino operator, is also building an integrated resort in conjunction with Japanese gaming machine maker Sega Sammy.
South Korea has also approved a 1.54 trillion investment plan by US casino operator Mohegan Sun and South Korean chemicals maker KCC Corp to build a casino and other facilities by 2019 .
Casino operators around Asia have tried to court Chinese clients, but Beijing's anti-graft campaign has weighed on the gambling industry in Asia.
Kangwon Land, the only South Korean casino to admit locals, is listed as Asia's top performing casino stock by raking in some 1.63 trillion won in revenue in 2015 while revenues at other foreigners-only casinos have declined because of Beijing's anti-corruption drive.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
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