South Korean Casino Cluster to Emerge in Incheon - Probably

Paradise City, a US$1.4 billion integrated resort in Incheon, includes an artistic take on traditional Korean bathhouses.A recent article by Michael Vanasky of The Innovation Group examines the casino cluster effect driving phenomenal tourism and gaming revenue growth in Macau and Manila. Naturally, other regions are looking to emulate their success. In Incheon, South Korea, where Paradise City opened its initial phase about two years ago and two more integrated resorts are being developed, if the IR works, Incheon, about an hour from Seoul, could become a regional cluster, including gaming.

Paradise, Korea's first casino operator, has partnered with Japanese electronic gaming specialist Sega Sammy to build the US$1.4 billion Paradise City, the first IR on the Korean peninsula. paradise leads the foreign-only casino market in Korea, and of the 17 casinos in Korea, only one is open to Koreans Of the 17 casinos in Korea, only one is open to Koreans. Paradise City is also located right in front of Incheon International Airport, the gateway to Korea, and serves more than 60 million passengers annually.And hey, if you want to hop over to these guys, you might just catch a glimpse of the future of entertainment and gaming!

Despite a slow start, Paradise City's revenues have been on the rise since Phase 1-2 opened in September with a retail plaza, boutique hotel, Northeast Asia's largest nightclub, art museum, and East Meets West Spa. deployment of the THAAD missile defense system in 2017. was helped by a thaw in relations with China following a freeze related to the Chinese government, and Chinese arrivals were up 15% last year nationally from a rock bottom in 2017. Paradise City President and CEO Park Pyung-yong says the city welcomes its IR neighbors.

Caesars Entertainment's casino resort, scheduled to open in 2021, is a 15-minute drive from the airport. Caesars' new IR will be the first and only internationally branded integrated resort in the region, so its debut will add a differentiated IR option," said Stephen Tite, Caesars' president of international development.

Caesars Entertainment plans to open the Incheon IR in 2021.

Caesars Entertainment plans to open Incheon IR in 2021. Caesars Entertainment

"In addition, IRs will drive innovation in tourism products, as evidenced in other markets such as Las Vegas, Macau, and Singapore." - New shows and attractions, better rooms, higher quality services that attract more visitors.

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On the other side of the airport from Paradise City, U.S. tribal casino operator Mohegan Gaming and Entertainment plans to open Inspire, called an integrated entertainment resort (IER). in December, Inspire will create a theme park and signed a deal with thegamblinghouse.org, Friday the 13th, and Star Trek.

The Inspire Super Arena will attempt to match the success of the Mohegan Sun Arena at the casino resort, located midway between New York and Boston, with acts provided by Live Nation, Mohegan's U.S. entertainment promoter. beginning in early 2022. Scheduled to open in phases, Inspire will also feature a dedicated air terminal, indoor air-conditioned water park, pool area, and the largest hotel ballroom in the Incheon-Seoul area.

U.S. tribal operator Mohegan Gaming and Entertainment has added a Paramount Pictures theme park. [It is scheduled to open in early 2022. U.S. tribal operator Mohegan Gaming and Entertainment has added a Paramount Pictures theme park. [Mohegan Gaming and Entertainment

This is a combination of integrated attractions that does not exist in the marketplace today," said Mario Contomercos, CEO of Mohegan Gaming. Inspire is the perfect catalyst for Incheon's transformation into the industry's next major entertainment hub."

Innovation's Vanaskie noted that simple addition is not enough to create a cluster effect. Macau and the Philippines had monopolies and dozens of casinos, but they did not benefit from clustering.

Macau and the Philippines were monopolies and had dozens of casinos, but did not benefit from clustering. Macau operators poured more than US$23 billion into the project in the 10 years since the opening of the Sands Macau in 2004. Total annual gaming revenues increased from about US$5 billion to US$45 billion.

In the Philippines, nearly US$5 billion has been invested, starting with the opening of Resorts World Manila in 2010; GGR rose from US$700 million in 2009 to US$3.6 billion last year.

Landing International's Shinhwa World combines a theme park, K-pop, and convention center on South Korea's Jeju Island. [Popular Jeju Island

Landing International's Shinhwa World combines a theme park, K-pop, and convention center on South Korea's Jeju Island. [Landing International

Another important element for Banaski is a strong tourism base. Macau attracted 9 million tourists in 2004 and reached 15 million in 2013. The Philippines recorded about 3 million tourists in 2009 and increased to 7.1 million last year.

Incheon will likely see the same scale of investment as the Philippines, depending on how quickly the second phase of the Paradise City and Inspire projects begin. On the tourism front, South Korea attracted 13.3 million tourists in 2017, mostly via Incheon, similar to the Philippines and Manila, down 3.9 million from 2016 due to tensions in China, and 15.3 million last year. If the investment envisioned by Incheon takes place, Korea's overseas casino GGR could be in store for Philippines-level growth, which was an estimated US$1.6 billion last year.

Vanaskie's paper also points out that clustering is not the only option for revenue and tourism growth from gaming. Singapore has used two independent, iconic IRs to create a gaming framework. On Korea's popular Jeju Island, Shinhwa World and Jeju Dream Tower are replicating the Singapore model in the Korean style, with investments approaching US$3 billion. The Korean gaming pie should get bigger, but it is not certain who will get the biggest piece of the pie.

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