Kangwon Land aims to revive casino business with $1.9 billion in spending

Kangwon Land Inc., the operator of South Korea’s only casino open to locals, has long been struggling with declining visitors.

Located in a remote area in the mountainous region of Gangwon Province, over 200 km northeast of Seoul, Kangwon Land has often been criticized by Korean and foreign casino players for its outdated facilities as well as inaccessibility.

More recently, Kangwon Land was dwarfed by the opening of two flamboyant and luxurious casinos – Mohegan Inspire Entertainment Resort operated by US firm Mohegan Gaming & Entertainment and Paradise City run by Paradise Co. – on Yeongjong Island, near Korea’s gateway Incheon International Airport.

To make things worse, Japan, Korea’s closest neighbor, plans to invest 11 trillion won ($8.2 billion) to open a large casino complex in Osaka by 2029.

Feeling a sense of crisis, Kangwon Land plans to renovate its existing facilities and build a new luxury casino and a hotel with 2.5 trillion won, or $1.9 billion, in investment by 2032.

The investment is part of Kangwon Land’s competitiveness strengthening plan to be announced early next month, people familiar with the matter said on Friday.

Of 2.5 trillion won, 1.8 trillion won, or over 70% of the total, will be spent to build a new casino and a cultural complex. Some 270 billion won will go to building a new hotel, sources said.

The casino operator also plans to expand leisure facilities by spending 100 billion won to revamp its walking trails around the casino complex, 80 billion won to build a wellness center for meditation and health checkups, and 30 billion won to build a luxury pool villa.

DEDICATED HELICOPTER, SKY BRIDGE

Before the completion of a new luxury casino, Kangwon Land plans to spend 80 billion won to build a second casino house adjacent to the current one over the next three years, sources said.

The company will also likely renovate its VIP rooms and operate helicopters to bring Korean and foreign visitors to its casino, they said.

In addition, Kangwon Land is expected to build a sky bridge linking its casino places to High1 Ski and Golf Resort nearby with 10 billion won in investment by 2030.

“With a significant investment, Kangwon Land hopes to turn from a casino operator into a resort complex operator,” said one of the sources.

Kangwon Land’s casino is located at the foot of High1 Ski and Golf Resort in Jeongseon County, Gangwon Province.

TO EXPAND NON-GAMBLING FACILITIES

Kangwon Land opened its casino in October 2000 to revive the local economy of Gangwon, hit hard by the closure of its coal mining industry.

Constructed under the Special Law on the Abandoned Mining Area, Kangwon Land is Korea’s only casino where Korean nationals are allowed to gamble.

The casino, however, came under criticism that it contributed to the growing number of gambling addicts in Korea, which led to a steady decline in the casino operator’s sales revenue with limited investments.

Currently, casino sales account for nearly 90% of Kangwon Land’s revenue.

The company said it plans to lower the proportion of its casino sales to 70% and increase culture and health-related facilities to attract non-gambling visitors as well.

Write to Jae-Kwang Ahn at ahnjk@hankyung.com
In-Soo Nam edited this article.