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onlinecasinoselite.org  › Blog  › South Korea Invites New Casino Business to Free Economic Zones

South Korea Invites New Casino Business to Free Economic Zones


CASINO GAME RULES


Last July, the South Korean government authorized the development of Free Economic Zones, or FEZ, in the country. By 2022, the government hopes that eight such zones will exist within its borders. New casinos will be a part of the country's up-and-coming FEZ. A spokesman has indicated that the government is now accepting bids from "qualified" applicants to set up shop in the eight FEZ. He also indicated that existing FEZ rules and regulations are now being updated and improved.

What is meant by free economic zone

South Korea's FEZ Intentions

A website dedicated to the development of South Korea's FEZ lists the following locations as optimal spots for global companies to set up shop: Busan-Jinhae, ChungBuk, Daegu-Gyeongbuk, the East Coast, Gwangyang Bay, Saemangeum-Gunsan, Incheon, and the area around the Yellow Sea. FEZ director Kim Sung-Jin invites companies to take advantage of North Korea's location in northeast Asia as a hub for their business and a place for financial investment. Sung-Jin promises not to disappoint those businessmen and women who choose to invest their money in the area.

Unclear Applicant Guidelines

The guidelines under which corporations may apply to be part of a FEZ were somewhat unclear in the past. Last June, two casino corporations accepted Sung-Jin's invitation to apply as investors. Those corporations were world-famous Caesars Entertainment of America and Universal Entertainment of Japan. Both corporations, though highly successful in other areas of the world, were rejected by South Korean officials for reasons undisclosed.

Rejection Rumors

Both Caesars and Universal had wanted to construct casinos in an existing FEZ near the metropolitan city of Incheon. Rumors have circulated that Caesars' $4.8 billion debt might have swayed South Korea's decision against the American company. Since the rejection, Caesars has gone public with a new plan in which they say they are going to ease their debt by selling bonds and making loans.

Criminal allegations against Kazuo Okada, a Japanese Universal founder, are also rumored to have given the South Korean decision-makers pause.

A New FEZ Application Process

To avoid a repeat of last June's uncomfortable Caesars and Universal rejections, the application process will now include a pre-screening phase in which less desirable operators will be eliminated from candidacy, according to sources.

To stimulate North Korea's financial growth, the government also plans to offer tax incentives to international investors of whom they approve.

Gambling Still Illegal for South Koreans

In spite of what looks to be a growing casino industry in South Korea, citizens are forbidden to wager money on games of chance in all but one of the country's 17 gambling halls. The casinos to be built in the FEZ, in fact, are to be designed for tourists and not the natives themselves.

The reason for gambling's prohibition in the country was laid on the line by the country's director of tourism quite bluntly: Koreans do not have the "mature culture" that would enable them to make use of gambling for leisure alone, according to Kim Jin-Gon. Jin-Gon went on to say that the government purposefully "blocks" its residents from casino gambling because the "fallout would be too big."

Famous TV Host Implicated in Illegal Gambling

Kim Yong-ManThe fact that gambling is not a legal option for residents in most of the country does not mean they don't do it. In March of 2013, North Korea's illegal sports betting epidemic was given a face when famous TV host Kim Yong-Man resigned from his hosting position due to his troubles with the law. Yong-Man has been accused of betting hundreds of thousands of dollars on various sports including UK football and horse racing.

Two Other Celebrities Also in Trouble

Accusations against two other celebrities came as the result of a sting operation that brought down an illegal sports betting ring earlier in 2013. The two TV personalities, Lee Soo-Geun and Tak Jae-Hoon, have been accused of illegal online sports betting to the tune of approximately $938,000. Indeed, with the prohibition of gambling in all but one of the country's casinos, the underground sports betting industry is thought to be a multimillion dollar enterprise that definitely holds appeal for wealthy South Koreans, including celebrities (read this post).

Gambling Ring Taken Down

Last spring, the government announced it would be cracking down on illegal sports betting shortly before taking down the ring that involved Soo-Geum and Jae-Hoon. At least 23 suspects were implicated in the illegal online sports gambling ring. The accused are thought to responsible for the launch of over 200 sports betting sites in 2011, many of which were advertised on non-gambling sports sites.

The One Place Where South Koreans Can Gamble Legally

Natives are allowed to gamble at one casino in North Korea: Kangwon Land Resort. The resort is located in the mountains approximately three hours from Seoul, but locals can take a "bullet taxi" and arrive there in half the time. Around 10,000 patrons crowd Kangwon each day. In 2011, the large customer base brought in a revenue of around $1 billion. This figure was larger than the 2011 income of all other casinos in the land combined.

Kangwon Land Casino Resort

The resort was placed obscurely in the mountains in order to deter natives from visiting very often. Bullet taxis have helped overcome that obstacle, however, proving true the old adage that "where there's a will, there's a way."

The government limits individuals to 15 days of gambling per month and the ID card of each guest must be checked upon entry. The maximum amount of money that may be wagered by natives is $280 per bet. Still, South Koreans find their visits to Kangwon fulfill a need that cannot be legally fulfilled elsewhere.

Kangwon gets extremely crowded. On any given day, the house holds about five gamblers for every one chair. In many of the world's countries, this overcrowding would cue officials to open more gambling facilities to the public. South Korea, however, continues to stick to is resolve and Kangwon remains the only legal casino for citizens, at least for the time being.