South Korean business and tourism experts convened on Friday to discuss how the country’s casino industry may be fine-tuned to produce consistent positive results.
The Korea Times Global Business Club and the Tourism Sciences Society of Korea hosted the event. The topic: “Strategies for securing sustainable competitive advantage in Korea’s Integrated Resort (IR) industry.”
Professor Kang Sung-sook of Tezukayama University said Japan’s IR model aligns government, investors and local communities to support sustained performance. The strategy is embodied by MGM Osaka, Japan’s first IR, now in development on Yumeshima Island in Osaka Bay. According to MGM, the IR’s world-class gaming, non-gaming amenities and cultural experiences will propel “Osaka’s evolution as a world-class destination”.
The $8.2 billion project is slated to open in 2030. It is expected to draw 20 million visitors annually, generate $3.4 billion in gaming revenue and create 20,000 jobs. By welcoming foreign workers, it could help offset the effects of Japan’s population decline, a trend former prime minister Shigeru Ishiba called a “quiet emergency”.
According to the American Chamber of Commerce in Japan, MGM Osaka will be “a catalyst for international hires” to grow the domestic workforce.
South Korea IRs: Room for improvement
Dong-eui University Professor Yoon Tae-hwan said Korea “adopted the IR concept at the legislative level”. But unlike Japan, it “failed to synchronise government ministries, local governments and private sector interests around a unified vision”.
He contrasted South Korea’s scattershot licensing, insufficient VIP marketing and lack of innovation with Japan’s “deliberate, well-coordinated approach”.
Yoon also complained about regulatory overlap. Currently, the Ministry of Culture, Sports and Tourism, the National Gambling Control Commission and other agencies jointly handle oversight. “The lack of specialised supervisory personnel has weakened on-site enforcement,” Yoon said. According to the Asia Review, he proposed an independent “control tower” with “clear, predictable standards to [draw] global investors and strengthen [Korea’s] international credibility”.
In keeping with the IR archetype of Macau and Singapore, MGM Osaka will include hotels, retail, restaurants, entertainment venues and MICE facilities. Yoon cited statistics showing that Korea IRs don’t presently offer such diversity.
“Japan’s IR operators invested in comprehensive destination management, not just gambling,” Yoon said. “But Korea often overlooked tourism integration” at the same level.
Will South Korea punters patronise Japan IRs?
MGM Osaka and subsequent IRs in Japan will provide formidable competition for markets like South Korea. Because South Koreans may only gamble at one domestic casino resort, Kangwon Land in a remote former mining village, they may choose to patronise the Japan IR. Osaka is only 90 minutes by air from Seoul.
Research cited by the Korea Travel Post suggests that once MGM Osaka opens, up to 7.6 million South Korean tourists may visit Japan annually, spending about $1.9 billion. But where some see threat, Kang sees an opportunity for cross-national cooperation.
“Many Japanese have never experienced casino gaming before,” she said at the Seoul conference. “Some of these new customers may be inclined to visit casinos abroad – particularly in Korea.” That could “turn competition into mutual benefit”.
Well prior to its targeted opening in 2030, MGM Osaka is already serving as a model for South Korea of how IRs can boost tourism.