With China’s continued crackdown on corruption, revenue is plummeting at Asia’s major casino and gambling hub Macau.

Meanwhile, the lackluster performance of Macau’s casino tourism is lending credence to Korea. Many investors argue that Korea is an ideal alternative destination that can attract tourists who want to gamble at casinos.

Korea is pushing to increase its number of integrated resorts, which refer to large-scale resort complexes that include a wide-range of entertainment and leisure amenities such as hotels, restaurants, and shopping and gaming centers. Some of the world’s most renowned integrated resorts are in the glitzy casino-filled cities of Las Vegas and Macau. 

To gain a bigger piece of the pie in the gaming market in Asia, the Ministry of Culture, Tourism and Sports has already given the green light to proposals to build three integrated resort and foreigner-only casino complexes: LIPPO & Caesars (LOCZ), Inspire and Paradise City on Yeongjong Island, which is near Incheon International Airport.

Paradise City is expected to open sometime next year and Inspire is scheduled to open by 2020. However, the fate of the joint $2 billion LIPPO & Caesars integrated resort now hangs in the balance.

Earlier this week, Indonesia-based Lippo announced in a filing to the Hong Kong Stock Exchange that it was reconsidering its planned $739 million stake in the integrated resort.

“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,” the filing stated. “The company has no interest in participating in any gaming aspect of the project in any event.”

Lippo is currently in negotiations with Caesars Entertainment over a possible sale of its stake. However, Caesars’ operating unit has filed for bankruptcy protection, looking to alleviate a fraction of its $18 billion debt, further clouding prospects for LOCZ. 

“What all of this means for the casino still remains to be seen,” said a ministry official. “Although it’s clearly too soon to say with any certainty, I don’t think this means anything negative for the future of casinos in Korea, nor do I think there’s any reason to believe that Lippo deciding to back out of their investments will have any effect on the country’s tourism trend.”

Regardless of Lippo’s announcement, the future of Korea as a viable casino tourism hub continues to show plenty of promise, especially considering that these future integrated resorts, in additions to casinos, will also include facilities for hallyu entertainment – one of the country’s biggest tourism pull among Asian travelers.

The government plans to increase the number of casinos from 17 to 20 by the year 2020, in the hopes that the increase will help boost the local tourism industry. With all but one casino in Korea open only to foreigners, the country’s casino industry relies heavily on tourists from abroad

According to statistics from the Culture Ministry, the number of Chinese tourists, who account for the vast majority of casino-goers, grew 42 percent last year to reach 6.1 million. The total number of international tourists showed an 8 percent increase, reaching16.1 million visitors. The ministry has projected that the number of Chinese tourists visiting Korea will hit 10 million by 2020.

By Julie Jackson (juliejackson@heraldcorp.com)