South Korean Casinos to Target Medical Tourists

South Korea’s largest casinos cater to foreigners. There are currently 16 major gambling centers operating in the country which are patronized almost exclusively by tourists. Only three of these are owned by the state-controlled Grand Korea Leisure, and yet the company holds the majority market share of all South Korean casinos that cater to foreigners. Moreover, Grand Korea expects to see profits increase by 10% next year to a net income of 110 billion won ($96 million).

Grand Korea has climbed to the top not by expanding their operations, but by increasing revenue at existing facilities. This is because South Korean gambling laws are quite strict when it comes to casino licensing, and the government has no intention of handing out any more licenses than have already been granted. Grand Korea would surely expand to the internet if they could, but the government does not grand licenses to operate online gambling sites in South Korea. Despite these limitations, while Grand Korea’s three casinos saw 100 million visitors in 2009, they hope to increase this number by 20% in 2010. In order to accomplish this goal, Grand Korea intends to target medical tourists.

An expected 70,000 people will visit South Korea for medical reasons in 2010 – a rise of 40% from 2009. The reason for the huge expected increase is that South Korea is currently negotiating a visa waiver program with China, which is where most of Grand Korea’s clientele come from. The waiver program is intended to boost tourism, but Grand Korea sees it as a potential source of new clients.

Grand Korea is also in the process of becoming privatized, like many state-owned companies in the country. The South Korean government intends to sell 49% of Grand Korea by 2010, with the possibility of additional stake sales occurring in 2012. If the company meets their projected goals next year, this public offering will have tremendous value to investors.