SJM Said to Be Invited to Run Casino at Seoul’s AirportVinicy Chan
SJM Holdings Ltd., Asia’s largest casino operator by revenue, has received a partnership proposal to run a casino being built at an airport about 30 miles from South Korea’s capital Seoul, people with knowledge of the matter said.
Macau, China-based SJM, founded by casino mogul Stanley Ho, was invited by a venture of South Korea’s Paradise Co. and Japan’s Sega Sammy Holdings Inc. to jointly manage the resort at the Incheon International Airport, said the people, who asked not to be named as the information is private. It would be SJM’s first foray into the country.
The foreigners-only integrated casino project, called Paradise City, is due to open in the first half of 2017 at the airport’s International Business Center and cost about 1.3 trillion won ($1.2 billion) to build, according to a Nov. 21 press statement from Sega Sammy. Las Vegas-based Caesars Entertainment Corp. and Hong Kong-listed developer Lippo Ltd. are building another casino on a site adjoining the airport and target to complete the first phase in early 2018.
Paradise’s shares reversed earlier losses of as much as 4.7 percent to close 1.7 percent higher. Sega Sammy rose 0.5 percent in Tokyo after also trading lower earlier. SJM fell 1.5 percent at the close of trading in Hong Kong, taking declines this year to 53 percent.
SJM, which held a four decades-long gambling monopoly in Macau until 2002, is facing slower revenue growth as China’s crackdown on corruption and lavish expenses forces Chinese high-rollers to curb spending. Sega Sammy, the video game and pachinko machine maker, is seeking to capitalize on SJM’s brand recognition among Chinese gamblers to draw them to the Korean project, the people said.
SJM is evaluating the proposal and hasn’t decided whether to accept, said one of the people. A spokeswoman for SJM declined to comment, while Lee Sang Yeon, planning department executive director at the venture between Paradise and Sega Sammy said the report is “unfounded.”
Paradise City will become the first foreigners-only integrated resort to open near Seoul as the city seeks to draw more tourists -- especially those from mainland China, who accounted for about 44 percent of the nation’s 13.1 million tourist arrivals in 2014, according to data from Korea Tourism Organization. There are currently 17 casinos throughout South Korea, only one of which is open to locals.
The resort, where construction started in November, will feature a casino with 160 gaming tables and 350 slot machines, two hotels, a shopping mall, spa and convention hall on its 330,000 square-meters site, Sega Sammy said in the statement.