SEOUL/HONG KONG (Reuters) - South Korea gave a preliminary greenlight for a large-scale foreigners-only casino complex to a consortium that includes Caesars Entertainment Corp (>> Caesars Entertainment Corp), seeking to draw in wealthy Chinese gamblers and their tourist dollars.

Shares in members of the consortium surged during Asian trade, with Hong Kong-based property developer Lippo (>> Lippo Limited) jumping 35 percent and Singapore's OUE Ltd (>> OUE Ltd) gaining 6 percent.

While frowning on gambling for its own citizens who only have access to one casino, South Korea has 16 small foreigner-only casinos.

A shift to big glitzy integrated resorts that include hotels and other amenities is being driven by both by South Korea's desire to develop its tourist industry as well as foreign capital eager to cash in on the country's proximity to China.

The complex, to be located near country's main international airport on Yeongjong island, is set to compete with one planned by Genting Singapore (>> Genting Singapore PLC) and Chinese property developer Landing International Development (>> Landing International Development Ltd) on the island of Jeju.

South Korea's Paradise (>> Paradise Co Ltd), one of two companies that dominate the country's foreigner-only casino market, has also teamed up with Japan's Sega Sammy Holdings Inc (>> SEGA SAMMY HOLDINGS INC.) in planning a separate casino resort.

South Korea's government noted, however, that the approval was preliminary and not a guarantee of a gaming license, with the government reserving the right to withdraw it if conditions are not met.

The entire development is expected to cost around 2.3 trillion won ($2.2 billion) and will be built over several phases, the companies said in a statement on Tuesday.

The granting of the preliminary licence comes after the government initially rejected in June a bid from the consortium, as well as separate one from Japan's Universal Entertainment Corp (>> Universal Entertainment Corp).

At the time, a government source said that the consortium's bid was rejected due to concerns about Caesars' credit rating. Moody's Investors Service lowered its ratings on the company and assigned a negative outlook in April, citing adverse gaming revenue trends.

This time, however, a separate government source said the consortium was the first to receive a preliminary approval among several parties interested in setting up a casino in Yeongjong island as it was the only one that satisfied the government's requirements on investment size, funding plans and credit ratings.

Universal, headed by Japanese billionaire Kazuo Okada, has not reapplied for a license.

The South Korean government will also seek parliament's approval to ease the process of granting foreigner-only casino licenses to offshore investors, shifting from requiring prior government approval to an open bidding process.

Although they have not formally said they will bid for a gaming license yet, Wynn (>> Wynn Resorts, Limited), MGM (>> MGM Resorts International) and other major foreign firms that had previously expressed interest in building a casino in the area could try again when the process is eased, the second government source said.

Many Asian countries, including the Philippines and Vietnam, are building large-scale casino resorts, hoping to attract Chinese gamblers and imitate the success of Macau, the world's casino capital which rakes seven times more in annual gaming revenue than Las Vegas. Japan is also looking to legalise casino gambling.

Gaming revenues in South Korea totalled $2.7 billion in 2013 according to research house CIMB, slightly higher than the Philippines at $2.6 billion but trailing both Singapore at $6.4 billion and Macau at $45 billion.

($1 = 1067.4000 Korean Won)

(Additional reporting by Narae Kim in Seoul; Editing by Edwina Gibbs)

By Joyce Lee and Farah Master