“Chinese agents receive an excessively large amount of money in their commissions,” said Rep. Lee Sang-il of the Saenuri Party during a parliamentary inspection of the Ministry of Culture, Sports and Tourism. “From 2013 to the first half of this year, 15 foreigner-only casinos in Korea paid a total of 1.0865 quadrillion won [US$916.81 billion] in commissions to Chinese agents.”
This figure accounts for 31.8 percent of total sales (3.415 trillion won, or US$2.880 billion). Current casino law says that casino operators can have professional sales agents under contracts and pay commissions to them. Commissions to them are excluded from casino sales.
An increase in Chinese tourists parallels an increase in commissions to such sales agents. In 2014, the commissions rose sharply to 500 billion won (US$423 million), from 356.4 billion won (US$300 million) in 2013. Paradise, the largest casino operating firm in Korea with five locations, paid agents 25 percent to 31 percent of their sales as commissions every year. Seven Luck, with three casinos, paid 3.3 to 7 percent.
In the case of the eight casinos on Jeju Island, they paid out 171.7 billion won (US$144.9 million), or 76 percent, of their total sales of 224.8 billion won (US$189.9 million). In 2013, they paid 192.2 out of 216.9 billion won (US$162.4 out of $183.4 million), or 88.6 percent, as commissions to agents. It was the tail wagging the dog at some casinos. El Vegas Casino paid out 103.1 billion won (US$87.15 million) in commissions despite its total sales of 32 billion won (US$27 million). Golden Beach Casino posted 47.3 billion won (US$40.0 million) in sales, but paid 176.5 billion won (US$149.2 million) in commissions, 372.5 percent, to its agents.
According to Rep. Lee, casinos on Jeju Island rely heavily on Chinese tourists, and small casinos resort to sales agents to attract Chinese tourists. The government has been paying little attention to casinos since it gave local governments control of them in 2006, Rep. Lee claimed.