perators such as Paradise Co. in South Korea are hiring Mandarin-speaking staff and offering VIP treatment including free flights, limousines and hotel stays to big spenders. Echo Entertainment Group Ltd. of Sydney and NagaCorp Ltd. in Cambodia cater to the junket operators who organize trips for Chinese gamblers with perks such as higher commissions, lower taxes and private jets.
“Premium mass players can be recognized as VIP players and treated better than in Macau,” said Lee Hyuk-Byung, vice chairman of Paradise, in an interview in Seoul. “And we have other attractions in Korea such as culture, fashion, food.”
South Korea Growth
Macau casino revenue fell last year for the first time and may decline another 8 percent this year, according to analysts surveyed by Bloomberg. By contrast, South Korea and the Philippines will grow 16 percent and 33 percent respectively this year, gaining from the spillover of Chinese gamblers, Deutsche Bank analyst Karen Tang wrote in a note.
Li Gang, director of China’s Macau Liaison Office, today reiterated President Xi Jinping call for the city to diversify from casinos. Gambling in Macau, the only place in China where casinos are legal, had declined as the anti-graft crackdown meant officials didn’t dare to visit, and also due to stricter rules and the country’s economic slowdown, he said during a session at the National People’s Congress held in Beijing.
Macau’s process to diversify its economy will take between 20 to 30 years to complete, and the government should strengthen its efforts to achieve this, Li added.
“The anti-corruption measures are discouraging some people from traveling to Macau, and as a result we are seeing a slight shift in travel from Macau to other destinations,” said Aaron Fischer, a Hong Kong-based analyst at CLSA. “Vietnam and Philippines will likely benefit as they are the closest. Korea will pick up people in the northern parts of China.”
Paradise shares closed 1.6 percent higher in Seoul trading, while the benchmark Kospi index was little changed. Macau casino shares mostly fell in Hong Kong trading, with Wynn Macau Ltd. closing down 3.5 percent, Galaxy Entertainment down 2.6 percent, and Sands China down 2.3 percent. The benchmark Hang Seng Index closed 1.1 percent lower.