South Korean tour operator and real estate developer Lotte Tour Development announced Friday that it is stepping further into its home country’s casino market with the acquisition of Paradise Casino Jeju Lotte.
The company is set to pay the total amount of KRW43.4 billion (approximately $38.8 million) for the gambling facility. Under a share purchase agreement with the casino’s current owner, Paradise Group, Lotte Tour will acquire 100% of the venue’s shares for KRW15 billion and will pay its debt which amounts to KRW28.4 billion.
Paradise Casino Jeju Lotte operates in the Lotte Hotel, which is part of the Joongmoon Resort Complex on South Korea’s Jeju Island. The gambling venue features 23 baccarat tables, 2 blackjack ones, a roulette table, and 24 slot machines.
Lotte Tour is currently developing a separate integrated resort with a gaming floor on the Jeju Island together with Chinese developers Greenland Group and China State Construction Engineering Corp. The property, named Jeju Dream Tower Integrated Resorts, is expected to open doors in October 2019.
Aside from a casino, the resort will also feature 1,600 hotel rooms operated by Grand Hyatt as well as a number of food and beverage facilities. Developers have previously said that their aim is to build the Jeju Island’s tallest and largest building with a total floor area of 303,737 square meters.
The Jeju Island, a popular tourist hub, has become a preferred location for even more developers to base their integrated resorts. Hong Kong-listed company Landing International Development has been opening in phases its Jeju Shinhwa World integrated resort with a casino and theme park on the island since last spring.
Visitors Numbers Dip for Third Consecutive Year
Although new resorts are springing and are expected to spring in South Korea in the next several years, official data shows that the number of foreign visitors to the country’s casinos dropped for a third straight year in 2017.
According to recently published statistics, the nation’s 16 operational foreigner-only casinos attracted 2.22 million visitors in 2017, down 6.2% from the previous year. The decrease was attributed to the fallout in the relations between China and South Korea over a missile defense system the latter country has deployed.
South Korea reached a visitor peak in 2014 when its casinos drew 2.96 million foreign patrons. However, visitor numbers have been dropping since then due to the severed relations with China. Last spring, the Chinese government banned the sale of package tours to South Korean destinations, which resulted in big withdrawal of Chinese tourists. Casino players from Mainland China have long been the biggest market for South Korean casinos.
Revenue from the country’s foreigner-only casinos amounted to $1.07 billion last year, down 2.9% year-on-year. In comparison, Kangwon Land, the company that runs the only casino in the country that admits Korean nationals, generated KRW1.52 trillion (approximately $1.3 billion) last year.