Why most S Korean casinos are open to everyone except Koreans

Agence France-Presse

Posted at Jan 28 2013 10:03 AM | Updated as of Jan 28 2013 06:54 PM

SEOUL - The casino industry is booming across Asia, offering anyone looking for high-stakes action a wide choice of venues, from high-tech South Korea to the Himalayan nation of Nepal and communist Vietnam.

Anyone, that is, except South Koreans, Nepalese or Vietnamese.

Why most S Korean casinos are open to everyone except Koreans 1
A man dressed in a traditional Korean outfit takes a break in central Seoul January 14, 2013. Photo by Kim Hong-Ji, Reuters

For conservative Asian countries, the financial pros and social cons of casino gambling pose something of a dilemma -- one that several have chosen to resolve by adopting a foreigner-only access policy.

The upsides are obvious in a region where rapid development has nurtured a taste and capacity for high-end leisure activities.

Casinos provide a consistent source of hard currency revenue, fuel tourism -- especially from sought-after high rollers from mainland China -- and boost the local economy.

Macau, now the world's largest gaming hub, saw its gaming revenue jump 13.5 percent to a record $38 billion in 2012.

But the social impact of gambling is equally well documented, in terms of addiction and broken families, as well as criminal activities like loan-sharking.

So a number of Asian countries have tried to have their cake and eat it, by building glitzy casinos but barring -- or strictly limiting -- entry to their own citizens.

Kim Jin-Gon, director of tourism in South Korea's Culture Ministry, cited a widely-held belief that Koreans are particularly susceptible to gambling addiction.

"Our feeling is that Korea does not have a mature culture that could enjoy gambling simply as a leisure activity," Kim said. "We block Koreans from casinos because the fallout would be too big."

-- Remote exception packs them in --

South Korea's ban is not total. Of the country's 17 licensed casinos, one -- Kangwon Land Resort -- is open to locals.

Its remote location in a mountainous area, several hundred kilometres and a three-hour express bus ride from Seoul, was supposed to deter salarymen from nightly excursions during the working week.

But special "bullet taxis" offer a high-speed, white-knuckle service that promises to get punters there in half the time, and attendance and revenue figures seem to support the theories about Koreans' proclivity for gambling.

Kangwon Land pulls in an average 10,000 visitors a day -- around five times the actual seating capacity -- and boasted revenue of nearly 1.2 trillion won (1.1 billion dollars) in 2011, more than all the 16 foreigner-only casinos combined.

This despite rules that restrict any individual from gambling more than 15 days a month -- ID cards must be shown -- and impose a maximum house wager of 300,000 won ($280).

The overcrowding led to calls for other casinos to be opened to Koreans but the government has resisted, insisting that Kangwon Land was a one-off project with the sole aim of revitalising an economically depressed area.

Director Kim warned that other casinos, especially in major cities, would be swamped if access was extended to all.

"If we let Koreans in, there would be no room left for foreigners, which would defy the whole purpose of the casinos in the first place," he said.

Nepal and Vietnam operate 100 percent foreigner-only casino policies, although in the case of Nepal it's a regulation often observed in the breach.

Vietnam's first casino opened in 1992 and there are now seven, with two more in the pipeline.

According to the finance ministry, casinos generated around 1.5 trillion dong ($72 million) in tax revenues in 2012.

For Vietnamese nationals, all gambling apart from a state-run lottery is banned, although illegal betting -- on everything from cock-fighting to English Premier League football matches -- is widespread.

While Vietnamese gamblers have no access to a place like Kangwon Land, they can simply cross into Cambodia, where huge casinos have been built near the border that cater almost exclusively to Vietnamese tourists.

Cambodians, needless to say, are not legally allowed to gamble in their own casinos, though presumably they would be welcomed at those in Vietnam.

-- An "anxious" compromise in Singapore --

Perhaps aware of the contradictions thrown up by foreigner-only policies, Singapore has opted for a compromise of open casino access but with special restrictions for the island state's citizens and long-term residents.

A Sg$100 ($80) entry fee aimed to filter out low-income gamblers, while any Singaporean who had filed for bankruptcy or received long-term financial state aid was automatically barred.

After a 2011 official survey showed an increasing proportion of low-income gamblers playing with large sums, the ban was expanded in June last year to include the unemployed and those on short-term welfare.

Casinos that fail to comply face a maximum fine that used to be capped at Sg$1.0 million but can now reach as high as 10 percent of annual gross gaming revenue.

Despite these measures, Prime Minister Lee Hsien Loong admitted during a visit to Australia in October that his government was still "watching anxiously" to determine the impact of the casino experiment.

"From a social point of view, we would like to say that it has been all right, but it is too early to say because the casinos have been operating only for two years and a half," Lee said.

Commercially, Singapore's two casino resorts have been an undeniable success, with a combined gaming revenue of around $5.0 billion in 2011.

That level of return has fuelled debate in countries like Japan about lifting its ban on casinos, which forces Japanese gamblers to travel to South Korea, Macau and Singapore to play the tables.

Taiwanese, meanwhile, may soon have a domestic option after the people of outlying Matsu island voted in July last year to open Taiwan's first legal casino.

The casino would be open to everyone except, perhaps inevitably, the Matsu islanders themselves.

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