The first comer to Nevada State in U.S. was Hoover dam as a part of the New Deal policy which then president Franklin Roosevelt introduced to spice up the staggering American economy in 1931.
Next was Nellis Air Force Base when World War II broke out in 1939 and then, people started swarming into the region.
Naturally, the final one was the casino complex such as El Rancho coming into Nevada due to the increase in needs for entertainment as the state saw the population rising up.
This is how the Casino industry started and expanded throughout the world for the past 70 years and it became as one of major foreign exchange earnings in some countries.
Korea also operates 16 casinos in total including one for domestics and the rest for foreigners in the country. They earned about 800 million dollars last year, which is quite a lot yet small considering the size of global casino industry with about 120 billion dollars. This makes the peninsula the barren Nevada before the Hoover dam.
Here is Grand Korea Leisure (GKL) as a new comer into the local casino industry with a goal of developing the industry and growing up as the top casino in the world.
GKL plans to foster local casinos by connecting it with some other industries for synergy effects.
The company now gears up its engine to go out to the global market based on the experience of becoming the leader among Korean casinos within only 4 years.
◆ Casino industry to see stable growth and move to Asia
The industry in fact kept on going sustainably with seven to eight percent growth rate every year even after its birth 70 years ago.
The industry continued to show the recovery since the new millennium in spite of a little hiccup in the 1990’s and saw its scale go above from 100 billion dollars in 2006 to 108.7 billion dollars in 2007. It is also expected to grow to 124.4 billion dollars this year despite the global recession.
Casino industry is likely to be immune to the economic downturns because life with quality is going to be pursued more and more as the individual incomes go up.
This is why Asia is expected be a next destination for casino industry given that a lot of countries in Asia have showed off their rapid growth in recent years.
Macao is a definitely kingpin not just in Asia but also in the globe by witnessing its revenue continue to grow from 7 billion dollars in 2006 to 10.3 billion dollars in 2007. The city finally achieved number one title in the market with revenue of 13.7 billion dollars amid the economic meltdown in 2008 while the former No. 1 Nevada recorded 11.6 billion dollars in revenue.
And more Asian countries such as Taiwan, Singapore and even Japan are moving to ease legal restrictions to groom their own casino industries.
◆ GKL to see growth along with bigger local market
GSK Co. Ltd., one of the leaders in casino industry in Korea, is growing every day since the opening of Seven Luck in 2006 for foreign visitors or residents in the peninsula.
The Seven Luck casinos, two in Seoul and one Busan, are clearly having most of the fun. The three Seven Luck outlets set new highs in revenue with more than 334 billion won last year, which is three times higher than in 2006 with 125.1 billion won.
GSK also reported that the market share increased from less than 30 percent in 2006 to more than 50 percent last year, putting the company the most influential in the local casino business.
The pie itself has also got bigger since the Seven Luck started its operation. Paradise group used to monopolize the domestic market with access to foreigners-only for about 40 years before GSK entered into the local casino market. The local market kept on shrinking by negative 8.4 percent starting from year 2000 and even in 2005 it went down by negative 15.2 percent.
However, the market was boosted up with 72.2 percent growth year-on-year in 2006 upon the opening of Seven Luck and the total revenue in the market recorded average 6.65 percent increase in size last year.
Analysts said that a start-up like GKL should give positive effects on the market in general since the efficiency would go up because of the introduction of competitiveness into the casino market in the region.
Koo Chang Keu, an analyst from Samsung securities, explained that setting up a new entity of GKL in the market is working for the local market in a good way and it is likely to go into the stabilization phrase once GKL goes public at the end of this year and starts implementing cost analysis.
◆ Go global through make-out with hybrid marketing
Contribution to domestic tourism or returning profits back to the society was not main concerns in local casino business when it was monopolized by one company.
However, the late-starter GKL took the different path from its predecessor in terms of the marketing for the purpose of stable and continuous growth.
One of strategies, which GLK is taking is, to adopt so-called hybrid marketing in connection with other industries including medicals and trade in the region that might look some-what irrelevant to casino.
"An important goal of mine is to help improve the perception of casinos among policymakers, politicians and the general public, making them aware that we are running a good and clean business that's earning foreign money for the country at a difficult time,'' said Kwon Oh-nam, president and chief executive of GKL.
He added that combination between tourism and trade would be pursued by implementing cooperative marketing with a variety of industrial fields.
Most existing casinos used to attract visitors to the gambling floor through typical ways including VIP marketing to focus on the high-paying customers, emotional marketing boasting the casino’s luxurious events, and free marketing to provide the customer with all expenses to stay for gambling.
But, CEO Kwon decided to do something different to allure more customers into the casino.
Kwon, who took the management helm at GKL in July last year, intends to use his experience and connections in the trade sector as he looks to connect his casino business with business travel and medical tourism.
Kwon traveled to several U.S. locations such as Hawaii, New York and Washington in April this year to pitch a concept he calls the ``business casino,'' or the integration of gaming with business meetings, medical services and shopping.
Visitors to the Seven Luck casino near COEX in southern Seoul will be able to access the medical services of the nearby Intercontinental Hotel, while the Busan Lotte Hotel outlet will soon have a health checkup center, Kwon said.
GKL is expecting around 400 billion won in revenue year and about 1 million visitors to the three Seven Luck casinos this year. Although that may account for a smaller rate in revenue per visitor compared to that of its private-owned competitors, such as Paradise Walkerhill, Kwon says the priority is to provide quality entertainment to a wider audience rather than milking more from hardcore gamers.
"This is our biggest strength as a state-run casino operator, providing a wide range of services that the whole family can enjoy, 쳌쳌쳌쳌