There’s one thing that foreign residents and visitors can do in this country that native Koreans are prohibited from doing: visiting a casino. All the casinos in the country (with the single exception of the remotely-located “Kangwonland”) are open exclusively to foreign passport holders. One of the biggest casino businesses in Korea is Seven Luck Casino, which operates 3 casinos: one in Busan and two in Seoul. The 7 Luck operation is owned and operated by Grand Korea Leisure (GKL), and the man in charge of GKL is Mr. Lim Byoung-soo. 10 Magazine sat down with Mr. Lim recently to hear more about what this public/private consortium is about.
1. How long have you been in charge of GKL now, and what have you done with your time thus far?
I just celebrated my 2-year anniversary as CEO of Grand Korea Leisure, and during my tenure we’ve worked hard to grow as much as we can within the many limits that we have. Keep in mind that this company is majority publicly-owned and that we cannot expand our gaming operations without many levels of approval. Our main job is simply to grow casino revenues so that we can give back to Korea itself and the tourism industry in particular.
One of the things I’m most proud of is that during my tenure we started the GKL Social Contribution Foundation (GKL사회공헌재단), and through this foundation we donate a substantial amount of money to great causes that help the most disadvantaged in society.
2. So who owns the stock in GKL? If the government owns part of it, do investors still get profits? Don’t they object to some of the donations that you’re making?
The Korea National Tourism Organization (KNTO) owns 51% of the company, so they hold controlling interest, while the other 49% is publically traded. As a government-owned company, we take our responsibility to the community very seriously, and are dedicated to helping those in need. We dedicate 2% of all pre-tax revenue to charity, which currently amounts to KRW 10,000,000,000 (approximately US$8,600,000). That’s not profits, it’s revenue.
Despite this we give a rate of return that is as good or better than most investments, so our stockholders are happy.
3. What plans do you have for the next few years for your 7 Luck Casino in Busan?
In the case of our Busan casino we have taken over the dinner theater that was next to the casino. We’ve now taken possession of the space and the expansion is in the planning stages. By June of next year, you should be able to visit our expanded casino Busan 7 Luck Casino.
4. What about for Namsan?
In the case of our Namsan Hilton Hotel location, it is very crowded and we would like to expand, but it’s just not possible. We’ve tried to get more space, and have already made some offers, but as of yet there is no space for us to expand into, so we’re stuck.
5. There are big changes going on in Samsung-dong though, aren’t there?
Yes. We recently purchased a new office building to make a new national headquarters very near the Gangnam COEX casino. This has allowed us to move out of office space we were previously using on the 4th floor of the building. This means that besides our 1st floor entryway, the 2nd floor main casino and 3rd floor VIP gaming area, we now also have a 4th floor to put to use. We are currently examining how best to use that space and once we have decided on that, we can work on getting the permits to proceed with construction.
6. I understand that you’re also bidding on the casino next to Incheon Airport on Yeong-jong Island. Does that mean you’re bidding against both domestic and foreign firms?
Of course! The whole objective of the project is to bring in foreign direct investment, so any bids must be done along with foreign firms. We are working our own bids with partners for a comprehensive casino-resort complex on the island.
7. Aren’t you worried about what will happen if you lose that bid? Certainly many of your customers will not bother coming to Seoul or Busan to gamble when they can gamble right next to the airport.
Sure, that’s something that we know could affect us. And while we know that our goal is to earn more money for both charity and Korea’s tourism industry, we can’t let things like that worry us. As gambling is one of those industries that is often frowned upon, we are overseen by representatives from every sector of government. We have our own internal controller, and the KNTO has another, the city of Seoul has another, and many more governmental ministries have oversight and inspections power over us as well.
So when we work in an industry that is subject to such strict oversight, we just spend most of our time and energy worrying about compliance; that it’s our main focus. We try to increase profits where we can for our stockholders, but we can’t worry about externalities that we cannot control.
8. Many Westerners enjoy betting on sports. Do you have any plans to start sports betting here in Korea?
No, we don’t have any plans to bring in sports betting because our customers have not yet expressed much interest in it. We could look at it if many people requested it, but that’s just not the case yet.
9. Being that Koreans cannot visit your casinos, all of the customers are foreigners. Where do most of your guests come from?
Until recently, the vast majority of our clientele were from Japan. The Japanese made up about 60% of the visitors to our casinos. That has gradually changed to the point where Chinese clientele now make up the majority of our gamers.
10. Does that mean that your casino guests more than doubled? Because it sounds like the Japanese never stopped coming, but they were just overtaken by the number of Chinese guests coming to the casino.
Yes, that’s right. In the last 10 years, the revenue for domestic gaming in general has increased multiple times over. It’s been great for the industry and it has helped us grow our donations to the community to the point where we could start our own foundation.