GGRAsia – Kangwon hours, mass tables back to 2018 levels: filing

Kangwon hours, mass tables back to 2018 levels: filing

May 20, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Maximum daily opening hours and maximum mass table games numbers at Kangwon Land (pictured), the only South Korean casino allowed to serve locals, have been restored to March 2018 levels, according to a Tuesday filing to the Korea Exchange by the resort’s promoter Kangwon Land Inc.

The firm said it had been notified of changes in the conditions for the casino business by the Ministry of Culture, Sports and Tourism the same day, under what the firm referred to as a “relicensing” procedure.

Under the changes, the casino can be open for 20 hours a day, instead of the 18 that had been allowed. The number of tables for table games can be increased to 180 from 160.

The new maximums reflect those that had been permitted up to early 2018. The firm had announced in December 2017 that the South Korean government had ordered a reduction in the casino’s opening hours.

Kangwon Land Inc swung to a loss of KRW156.1-billion (US$127.3-million) in the first quarter of 2020, compared to a KRW102.4-billion profit in the prior-year quarter.

Casino sales in the first three months this year fell 39.2 percent year-on-year, to KRW200 billion, from KRW329.0 billion in the prior-year quarter.

The group did not give commentary on the reasons for the fall in casino sales. But the resort’s casino had closed on February 23 on a temporary basis as a precaution locally against the spread of the Covid-19 infection. Due to repeated extensions to the shutdown period, the casino did not open again – albeit on a partial basis – until May 8.

The company had said in a May 7 filing announcing permission to reopen, that it anticipated lost casino sales would amount to KRW267.8 billion calculated from the start of the casino shuttering on February 23.

JP Morgan Securities (Asia Pacific) Ltd said in a Tuesday note that the new opening hours and table numbers for Kangwon Land Inc’s property came after the relevant ministry “renewed its three-year casino licence”.

Analysts DS Kim, Derek Choi and Jeremy An wrote: “With the previous licence renewal in 2017,” the ministry had “abruptly reduced its mass table capacity (from maximum 180 tables to 160) and operating hours (from 20 hours per day to 18), and this is now reversing.”

But the brokerage added that “details such as the timeline (including when its mass floor can re-open) and implementation (e.g., actual number of tables on the floor, social distancing rules, etc.) are subject to further discussion with the Ministry of Culture, Sports and Tourism”.

The institution nonetheless said it was a sign the “regulatory environment for Kangwon is turning more favourable,” although it added this was “not totally surprising given the unprecedented downturn from Covid-19”.

“From what we understand, the increased capacity and operating hours will stick throughout the licence term until the end of 2023, which will be a boon for this (severely) capacity-constrained casino for coming years,” the analysts added.

JP Morgan further noted it saw “upside” potential for its 2021 to 2023 business performance estimates, but added it was “not making any adjustments yet, given (still) limited visibility on [full] casino reopening and effective capacity under social distancing.”