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January 18, 2007
The casino industry is seeing its fortunes rise in Seoul. Grand Korea Leisure, a subsidiary of Korea Tourism Organization, last year advanced into the casino business for foreigners with its Seven Luck casinos, ending 38 years of domination in the city by Paradise Walkerhill Casino.
Thanks to the new competition, the casino market has exploded. The number of foreign visitors to Seoul's casinos exceeded 700,000 last year, up from around 330,000 in 2005. With W120 billion (US$1=W937) in revenue during its first year, Grand Korea Leisure easily beat initial expectations of W64 billion for 2006.
Local casino operators can find inspiration abroad. After Macao ended a 40-year gaming monopoly in 2002, the gambling industry in that territory grew to match that of Las Vegas in just four years. The change brought a boost in jobs and raised per capita GDP to exceed Hong Kong's. The shift came about as the government changed its perspective on gambling as a vice that should be restricted to a business that should be nurtured.
Casinos can be very profitable. According to research by Lee Chung-ki, a professor at Kyunghui University, per capita spending in casinos is equivalent to exporting 76 semiconductors or four color TVs. Put another way, if 11 foreigners visit a casino, they will spend the equivalent of one exported car. The business can also create huge job opportunities. Three to four employees serve each table in a casino, including dealers, currency exchangers and serving staff. Furthermore, casinos employ three shifts all year round. That explains why Seven Luck Casino needed 1,400 regular staff last year.
Korea's location between China and Japan makes it particularly well positioned for the gaming business. Because both Japan and China forbid gambling (with the exception of Macao), Korea can easily capitalize on its cash-rich neighbors. Last year, Chinese visitors to Paradise Walkerhill equaled those from Japan, with each group making up 33% of the total. This year, the Chinese figure is expected to grow to 40%.
To add value, Korea's gaming companies are turning to the country's IT companies to build advanced gaming centers. High-tech membership cards can keep track in real time of what games gamblers prefer and how much they bet. The cards even keep record minor details like how much sugar a customer prefers in his coffee, so the next time he's in town a waitress can have ready for him a latte prepared exactly the way he likes it.
Changes are already visible at home. On Jeju island, two casinos for foreigners that closed last year because of dwindling tourists recently reopened, as the closure drove Japanese tourists to the Philippines.
"Though few oppose casinos for foreigners, many people worry that the industry will lead to a flourishing gambling business for Koreans," said an official from the Ministry of Culture and Tourism responsible for supervising casinos. "Korea should consider carefully before deciding whether to really develop the industry."
In contrast, Prof. Roh Young-sang from Pusan Women's University said the industry must ramp up to succeed. "If Korean casinos fail to develop into a total leisure destination like Las Vegas, they will all go bankrupt," the professor said.
 January 16, 2007
Neteller plc announced today that it has temporarily suspended its shares on the London AIM stock market after its two Canadian founders and former directors were arrested in the United States. Investors were left rather shocked by the news after Neteller issued the following statement:
"While travelling separately in the US, Mr (Stephen) Lawrence and Mr (John) Lefebvre, both former directors of the Company, were detained by US authorities on Monday, 15th January 2007. Other than as shareholders, neither Mr Lawrence nor Mr Lefebvre has any current position with or connection to NETELLER. The Group has not received any communication or correspondence from any US authority regarding this or any related matter. . . Pending clarification of the situation the Board has sought immediate temporary suspension of NETELLER's shares. Further information will be issued in due course."
Stephen Lawrence resigned as a non-executive director of Neteller on October 13, 2006 having stepped down as non-executive chairman of the Company on May 11, 2006. John Lefebvre had earlier resigned as a non-executive director of Neteller plc on 15th December 2005. Both individuals continue to hold, however, substantial minority stakes through their own investment corporations.
It is not known on what grounds the arrests were made or whether there is any connection with Neteller itself. Previous activity by American authorities in other cases involving online gaming executives have related to allegations of wrongdoings by individuals in earlier years. In any case, it is easy to speculate that pressure is being brought to bear on Neteller at a sensitive time given the passing of the "Unlawful Internet Gambling Enforcement Act of 2006" in October 2006 and the nine-months period of consultation in which the construction of the law will be established.
Neteller plc has already publicly stated its intention to comply with the American legislation despite not being under the jurisdiction of America. In the meantime, it continues to do business involving the transfer of funds to the accounts of poker companies such as Pokerstars, Full Tilt and MANSION, three of the major entities that still accept American players.
January 10, 2007
The recent reports of the casinos in Nevada show that the profit from revenue for 2006 has risen almost 9% compared to the year before. The dollar amount of the profits for 2006 by the casinos was $2.1 billion, with the famous Las Vegas Strip accounting for more than half of it.
The total revenue generated by the casinos was a little over $24 billion. The state got a cut of a little over $928 million in the form of gambling taxes and licenses.
In the casino, the slots are still the king of profits - accounting for over 67% of the total revenue. Poker rooms, although most popular, have the smallest share of close to 1.5%.
The numbers for year 2007 will look even better, according to some analysts. This could due be in part to the efforts of the US DOJ to rid of online gambling and bring the tax money lost to Internet gaming back to the pockets of the local land based casinos.
January 08, 2007
Online gamblers who use an HSBC credit card will soon feel the full force of the bank’s planned increase in card fees across all online and telephone gambling, to bring it in line with its financial service competitors.
From 1 February HSBC customers will be charged the cash advance rate rather than the normal purchase rate, meaning that they will immediately pay interest at between 21.9% and 27.8% instead of between 15.9% and 22.9%.
However, customers will not be charged a one-off fee, which is applied to other cash transactions such as buying foreign currency.
'This is one of a number of changes we have made to our credit card offering recently to bring us in line with the competition,' an HSBC spokeswoman said.
There is currently no uniform policy on charging for gambling across the UK credit card industry, with providers such as Barclaycard and Lloyds charging such spending at their lower purchase rates, whilst MBNA (Bank of America) and RBS/NatWest and Egg charge at the cash advance rate.
In 2004, the US bank Citibank decided to stop processing any internet gambling payments at all by UK holders of its credit cards.
One potential loophole in HSBC's strategy is that any payments channelled via the online payment service Paypal will be charged as a retail purchase, attracting a lower rate of interest. HSBC said neither it nor any other banks could tell what the ultimate destination of a Paypal transaction money might be.
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