Jeju Island in South Korea was once a hotbed for casinos. This is currently not the case because of COVID-19. Several small entities have folded and another is about to be added to the list. GGRAsia reports that, according to a letter that was sent by the Jeju KAL Hotel to a labor union, the hotel management is going to dispose of the property. This means the foreigner-only MegaLuck Casino located there will likely have to shut down.
MegaLuck’s Future in Question
MegaLuck is managed by New Silkroad Culturaltainment Ltd of Hong Kong, which calls the casino its “entertainment business.” According to an interim report filed in September by the operator, this segment had no revenue for the six months ending June 30. This was the most recent set of results.
GGRAsia contacted MegaLuck’s management and New Silkroad regarding the information provided to the union concerning the disposal of the hotel. They declined to comment.
Jeju, which has many foreigner-only casinos, has seen its inbound foreign tourist business severely impacted by travel restrictions related to the COVID-19 pandemic.
New Silkroad had full-year revenue in 2020 of HKD391,000 ($50,148) from customers outside its entertainment business. It also suffered a segmental loss in the amount of HKD64.8 million ($8.3 million).
Hotel Confirms Disposal
KAL Hotel Network Ltd. (KHN), the operator of the hotel, stated in a January 4 letter to the Jeju Tourism Service Labour Union’s KAL Hotel branch that KHN’s board had decided to dispose of the hotel on December 23. The move was made in order to allow the company to “overcome its financial problems.” The letter didn’t provide any details about the timing or the identity of any acquiring entities, nor any consideration.
According to a union representative, speaking with GGRAsia, the MegaLuck and Jeju KAL Hotel lease contracts are renewable each year with six months’ notice for termination. The operator of the hotel notified the casino’s management about the possibility of selling the property in September of last year.
GGRAsia was told by the leader of the union branch that approximately 60 MegaLuck casino workers, who aren’t union members, approached him to express concern about their future jobs.
Korean Air Co Ltd, KHN’s parent company, informed GGRAsia by telephone that the timing of the disposal was still unknown.