GAMING | Chinese developers invest in overseas casino projects

Osaka, Japan’s third-biggest metropolis, proposed the Yumeshima island, a reclaimed island in Osaka Bay as the casino resort site after lawmakers submitted a bill to legalize casinos to parliament

GAMING
Chinese developers invest in overseas casino projects

Facing a drop in profits in their home market, Chinese real estate companies are trying to participate in overseas casino projects, according to a report released by Morning Whistle Group, a Shanghai-based Internet platform that helps Chinese capital conduct cross-border investments as well as overseas mergers and acquisitions.
In the report cited by China Daily, it’s mentioned that Jeju Island in South Korea and Queensland in northeast Australia have become the most popular destinations for Chinese developers in the first half of 2014.
An example of that is the announcement earlier this month that State-owned developer Greenland Holding Group was forming a consortium with Australia’s Crown Resorts to bid on a large-
scale, mixed-property complex that includes a casino in Brisbane’s central business district.
The Shanghai-based developer has been trying to maintain its growth through the diversification of its overseas business, aiming to double its overseas sales to 40 billion yuan (USD6.4 billion) next year.
Another case cited is Aquis Casino Acquisitions, a company controlled by billionaire Hong Kong developer Tony Fung, which plans to make acquisitions of USD270 million, including Reef Casino Trust and Casino Canberra.
At the same time, the ASF Consortium, which includes two significant state-owned Chinese companies, said it would accelerate plans for a $7.5 billion resort, casino and cruise ship terminal in Queensland.
The increasing interest of Chinese real estate companies in overseas casino projects comes at a time when there are plans to legalize casinos in Japan as early as next year. Macau gaming operators already announced their interest in investing billions of dollars in what is projected to be the world’s second-biggest gaming market.
The South Korean government has recently approved the construction of its first foreign-owned casino, developed by US firm Caesars Entertainment and Indonesian conglomerate Lippo Group. Chinese property developer, Landing International Development, is teaming up with Genting Singapore to develop a USD2.2 billion casino resort in South Korea.
“The gambling industry is illegal in the Chinese mainland, but the sooner-than-expected rise in return has attracted increasing numbers of Chinese real estate players betting on overseas markets,” said Chen Xiaoyi, an analyst at Morning Whistle, cited by China Daily.
Paradise Sega Sammy unveiled plans recently to build a vacation resort on the small island of Yeongjongdo, a 15-minute walk from the country’s main transportation hub, Incheon International Airport. The resort will include a 11,190-square-meter, foreigner-only casino. It will also feature a five-star hotel as well as several entertainment venues and convention facilities.
The company behind the mega-sized resort is a joint venture between Paradise Group, a South Korean leisure industry group, and Japan’s Sega Sammy Holdings, which will operate the resort.
In a press conference held in Seoul (less than an hour’s drive from Incheon), the promoters mentioned their expectations of making Yeongjongdo into “a small Macau.” Choi Jong-hwan, chief executive of Paradise Sega Sammy, has said that most of the customers of the casino are expected to be from China.
“Of the 11 million foreign travelers to Korea last year, 3 million were Chinese and 2.7 million were from Japan. We expect the number of Chinese visitors to increase steadily over the years,” he expressed to the Korea Times. “In the case of other major gaming destinations like Macau or Las Vegas, only a small number of the customers gambling are locals. Since Yeongjongdo is closer to Beijing than Macau is, it will be easier to visit Incheon than to fly to Macau,” he added.
Chinese tourists have also named Australia as their most desirable overseas holiday destination. Queensland is planning to release more casino licenses in 2014 to break up the monopoly of local gambling industries.