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Asia Bets Big on Gambling While Korea Hedges
Korea has 13 foreigner casinos, but just one in Seoul. Is it missing Asia's gambling phenomenon?
Todd Thacker (internews)     Print Article 
Published 2004-08-03 17:05 (KST)   
A screenshot from the Paradise Casino Web site. Cameras were prohibited.
©2004 Paradise
Asia's latest phenomenon of gambling tourism has it hitting the jackpot, but Korea may be dealing itself a busted hand.

With billions of dollars flowing into the region from a local increase in affluence, online gambling and the popularity of gambling tourism, the rewards and risks of catering to gambling enthusiasts are becoming more acute here.

Other nations have taken steps to cash in on the phenomenon. New government-licensed casinos are popping up in Singapore, Taiwan and Japan, providing local communities with eye-popping tax revenues and many new jobs.

Industry analysts for Korean tourism argue that the government should follow suit, increasing the number of gambling facilities here to vitalize the economy through increased tourism and local job creation. One estimate maintains that up to 1,000 jobs are created with each new casino.

But the government says it is still "studying the matter." Officials at the Ministry of Culture and Tourism appear to be cautious with foreigner gambling given the domestic fallout from promoting this addictive form of entertainment. There is only one licensed casino for Korean nationals.

OhmyNews went undercover to find out more about the operation and patrons of Seoul's only casino, the foreigner-exclusive Sheraton Paradise Walker Hill Casino, located to the northeast of downtown Seoul along the Han River.

Late Tuesday evening, the Paradise Casino -- Korea's largest -- was about two-thirds full with about 500 foreigners. It is open 24/7 and last year brought in nearly $200 million. Despite this influx of cash, the casino's "luxury" décor is only half-hearted. The atmosphere was lackluster and devoid of anything other than methodical play.

Dai sai is a three-dice game of chance.
©2004 Paradise
The Paradise gives gamblers the choice of 113 slot machines; one big wheel; 14 American roulette tables; 32 baccarat tables; 31 black jack tables; two craps tables; and 12 tai sai tables. The roulette, baccarat and black jack tables are divided into 10 and 50,000 won minimums and 1 to 3 million won maximums.

A yen for yuan

Here on the peninsula, big spenders from Japan and a burgeoning class of "new rich" from China are spending billions of won, the closest and most convenient destination for both.

An American Gambler in Seoul

Another black jack player was a Korean-American from Los Angeles, a young man of about 25 who said he was a law student at a prominent east coast university.

He seemed a little bored with the game and yet kept placing bets. Based on the lateness of the evening and rate at which he was losing money, he likely brought about 1 million won with him.

But the question was: just where does a "kid" get that kind of cash to throw away on a Tuesday night? I assumed his doting parents back in LA had sent him to the motherland flush with cash and orders to "take it easy" over the summer.

I couldn't bring myself to ask. Had he been a non-English speaker, I would have. The worst that could happen would be me being "the hairy foreigner stick his big nose where it shouldn't be."

On one hand he played a silver-colored 100,000 won chip, one of a number in his stack. Asked if his heart started racing as the dealer placed a card by so much of his now imperiled money, he shrugged. "It used to," he said. "But not any more."

He lost the chip with a flip of the dealer's card. No reaction. It was almost like he was waiting to feel something, but it never came. I lost 20,000 won on that same deal. But that silver chip of his, it was all I came to the table with, and acutely felt like the small fry I was.

My "lawyer" was a good source of tips, though. He advised me to let the dealer break himself. "Don't hit on a two, three, four or five." It's a common novice mistake to aim for the highest possible hand, thereby tightening your own noose. / T. Thacker
The Katos, a sixty-something couple from the Tokyo suburb of Asakadai, were trying their luck at the Chinese three-dice game called tai sai. They said they came to the Walker Hill on the recommendation of friends. "We like the fact that it is a short trip and very inexpensive," said Mr. Kato, adding that they have generally spent a few hundred dollars at various hotel casinos while traveling in Asia over the past few years.

Another Korean-Chinese couple was playing at a 10,000 won minimum black jack table. The wife, who was watching her husband play, declined to give her name or where in China they live. But she was more than happy to talk about their fortunes.

"We came here for five days just to gamble," she said, adding that they each gamble about 1 million won per day, but depending on how much they win or lose, they bet more money or less the next day.

Her husband pulled out a large wad of red, 100-yuan bills (each worth about 14,100 won) with Mao Tse Tung's beaming face. Unlike the Katos, who had already converted their money at an official bank rate, the Korean-Chinese handed over his cash right at the black jack table, to be converted by the less fair favorable house rate.

The man eventually received about 650,000 won in casino chips, supplementing his diminishing stack. Others around the table were buying chips with 1 million won checks. Nearly everyone in the casino had handbags or fanny packs literally bulging with cash.

Manning the wheel of fortune

Working the 10 p.m. to 6 a.m. shift, one unoccupied casino employee said he found his job on the Internet after quitting a part-time job in a restaurant. His position pays about 60,000 won per day, substantially higher than Korea's hourly minimum wage of 2,800 won. He said he is a university student and would quit in late September just before a new semester.

When asked why there was only one such casino in Seoul, his colleague said the government had only granted one license, but added that since there are many such licensed casinos in Jeju Island, it didn't make sense for the government to hold back in Seoul.

He confirmed that he was aware of "a relationship" between the licensed establishments and organized crime.

Weighing the domestic risks of cashing in

In a 2003 report presented to Korea's National Assembly by the Korean Racing Association and the Seoul Olympic Sports Promotion Foundation, about 1.3 million adults, or 9.3 percent, class as compulsive gamblers. This includes horse, boat and bicycle racing (44.4 percent), Internet gambling (30.9 percent) and illegal operations for card games like gostop, poker and more traditional casino games like baccarat (19.85 percent), among others.

This rate is substantially higher than nations with more widespread gambling venues. Rates of gambling addiction in the U.S. population are about 1 to 2 percent. Canada and Australia hover around 2.6 percent and 2.1 percent respectively. Addiction in Korea tops even the gambling-permissive state of Nevada, which tops out at around 8 percent.

In the nearly four decades that the government has licensed foreigner-only casinos in Korea -- the first being in Incheon back in 1967 -- it has kept a tight lid on the domestic business fearing a backlash from the church groups and community leaders who insist the addictive nature of gambling could seriously harm large swaths of the population.

If the floodgates opened up, statistics from other countries with liberal gambling laws show that there is a potential for disaster.

Korea's welfare system tends to overlook many of the weakest and worst afflicted behind. Nor does it have a long history of mental health care. Many 30- and 40-somethings are unlikely to seek help, considering the stigma of perceived "psychological illness."

Moreover, the legal system until recently made divorce a Herculean task. The wife of a compulsive gambler would stand to lose her children to her husband and his family, regardless of his culpability. Social stigma against divorced women also kept many in abusive partnerships.

Another complication is that regional governments that open and manage casinos tend to themselves become addicted to the huge tax profits. Lax enforcement of social safeguards and cases of corruption and increased organized crimes are common side effects.

Just how cautious the government is about opening more casinos to Korean nationals can be seen in the laws listed on the Kangwon Land Resort and Casino Web site of the only casino for nationals and foreigners.

The law also restricts area residents to patronize Kangwon Land just one day a month -- every second Tuesday. Identification is strictly enforced. Every Korean national has an ID card with a 13-digit number revealing his or her age, sex and birthplace.

Third, there is an "access restriction" provision allowing family members of a compulsive gambler to request Kangwon Land to refuse that person access.

All one needs is to submit a copy of the family register, an ID, a photograph of person to be banned, and a statement on why the restriction is necessary to the security management office.

Mr. Paradise, gambling mogul

President of Paradise Group Jeon Rak Won
©2004 Paradise
The casino magnate of Korea is Jeon Rak Won, 77, consolidated Paradise Group in 1973. In 2003 it became the 33rd largest company in Korea.

The group runs three hotels and four casinos in Korea, and a safari park casino resort in Kenya. The Group also has branched out into duty free shopping, manufacturing, and finance.

According to Son Dae Hyeon, Hanyang University professor and author of the book "Casino Korea," Korea receives about 5.5 million tourists annually, and of those about 80 percent stay in Seoul. Last year the Seoul Paradise Walker Hill Casino made nearly $200 million.

"While the government has set its sights on the Chinese market, we've fallen behind Hong Kong, Macao, and of course Japan, Singapore and Taiwan in the casino industry," he said. "We're not being bold in our selection of specific industries and losing out on the $10 billion a year gaming industry."

He wonders why there has been no change in the last 36 years to Seoul's single gambling venue. Son said that about half of all foreign gamblers patronize the Paradise Casino, while Jeju's eight casinos take up about another quarter of all foreigner gambling dollars.

For years, Seoul-based hotels have been petitioning the government for permission to open their own casinos.

In advance of the 2002 World Cup, Lotte had submitted to the government plans for new and annexed buildings to house a hotel casino. The Oakwood Hotel in the affluent Seoul neighborhood of Gangnam had set aside 6,600 square meters in its convention center for one.

None of these plans were realized in light of miles of government red tape.

A spokesman from the Ministry of Culture and Tourism told OhmyNews that they were still looking into the policies surrounding foreigner-only casinos.

With a downturn in the local economy and hundreds of billions of won at stake, the government can no longer ignore the potential for a needed shot-in-the-arm to Korea's economy, Son says.

Optimistic estimates from the tourism industry put the rate of gambling tourism at about 18 percent of all tourists who come to Korea. Most of these are from Asian nations, with Japan, China and Taiwan topping the list. There are 13 foreigner-exclusive casinos in Seoul, Busan, Incheon, Seokcho, and Gyeongju, respectively, and eight on Jeju Island.

Apart from credit delinquency, however, some say catering to a foreign gambling crowd is a win-win situation for the nation since it benefits from a raw influx of cash and tourist dollars, while not having to deal with the dark side of addiction.
©2004 OhmyNews

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