Korean foreigner-only casino operator Grand Korea Leisure has confirmed it is looking to conduct a feasibility study around potentially acquiring the site of one of its Seoul casinos – Seven Luck Casino at Seoul Dragon City – following local media reports claiming the company wants to address ongoing rent issues.
According to the reports, the acquisition strategy is being considered because GKL’s existing leased business structure is “burdensome and restrictive”, with annual rent payments estimated at between KRW30 billion and KRW40 billion (US$20.3 million and US$27.1 million) – representing more than half of the company’s annual operating profit.
The lease model also imposes restrictions on its ability to adjust floor space or renovate to enhance the property’s appeal at a time when competition for international customers has never been higher.
The reports suggested that while developing its own integrated resort-style offering was not a realistic option due to the scale of investment and licensing requirements, GKL considers the acquisition of a dedicated casino building in the city center as a viable option. The goal, they added, is “environmental improvement” rather than “scale expansion”.
In a filing with the Korea Exchange in response to such reports, GKL said, “Currently, the company is preparing to apply for a preliminary feasibility study with the Ministry of Strategy and Finance regarding securing its own business site. No specific decisions have been made regarding this project.
“We will provide a new disclosure regarding this matter once specific details are finalized or within one month.”
Aside from Seoul Dragon City, GKL operates Seven Luck Casino – Gangnam COEX in Seoul and Seven Luck Casino at Busan Lotte Hotel.