Aaron Fischer, head of consumer and gaming research at CLSA Asia-Pacific markets, told CNBC the Caesars-Lippo venture marked a positive step for South Korea in terms of the scale of investment.
"The big difference between this project and South Korea's existing casinos is that this is a major step up in investment being around US$2.2 billion when completed," he said.
"If companies spend enough money they can create an attractive destination that includes a premium offering of hotels, shopping, restaurant and gaming," he added.
(Read more: Macau casino stocks set for 'watershed' year)
But even though the opening of the Caesars-Lippo casino would be a positive step in terms of the size of investment, Fischer said he doubts South Korea would ever rival the likes of Macau, Vegas or Singapore.
"If it was the first of ten projects similar in terms of the size of investment then yes, you could see the market expanding significantly, especially given its proximity to China, but we are not there yet," he said.
"Restrictions on locals gambling there are of course also capping the size of the market," he added.
(Read More: Macau gambling revenue surges 40 percent in Feb)
Chinese visitors make up a third of tourists travelling to South Korea. The country plans to draw 10 million Chinese visitors a year by 2020, a 53 percent increase from 2012, data from Korea Tourism Organization showed.
Japan's Sega Sammy Holdings and casino operator Genting Singapore are also seeking licenses to build casino resorts in South Korea.
—By CNBC's Katie Holliday. Follow her on Twitter @hollidaykatie.