The management at Kangwon Land, a resort with South Korea’s only casino allowing locals to bet (pictured), has given GGRAsia an update on its “K-HIT 1.0 Project”, an upgrade and revamp of the property.
The initiative started in April last year. The venue’s promoter, Kangwon Land Inc, says it was in response to the effort by neighbouring jurisdictions to attract South Korean players, a trend that had intensified since fewer Chinese players were going to those neighbouring countries.
Kangwon Land’s revamp was also spurred by the looming competition of an integrated resort (IR) with casino at Osaka, in neighbouring Japan, which is scheduled to open in 2030.
“We are closely analysing the [potential] impact on the [South Korean] domestic market of the Japanese casino opening,” said Kim Hyukha, Kangwon Land Inc’s casino management team general manager.
He added: “Our 10-year sales strategy considers that there might be fewer clients in the future. The Osaka IR would be competitive among East Asian casinos since Japan has opened its tourism market with visa-free travel,” for some nationalities, “and China has concentrated its casino sector in Macau and outlawed such business on its mainland.”
Mr Kim added: “Osaka IR people have visited here several times already, studying us [our business].”
In full-year 2024, Kangwon Land Inc’s net income stood at nearly KRW455.38 billion, up 33.6 percent year-on-year. Annual sales were just under KRW1.43 trillion, a 2.8-percent increase from the previous year.
But according to Mr. Kim, amid the modest performance of recent market entrant Inspire Casino, a foreigner only facility at Incheon, “we doubt the Osaka IR could expand that [regional gaming] pie.”
He added: “The East Asian casino boom has, by its nature, been driven by Chinese tourists.”
The operation of Inspire Casino was recently taken over from its developer Mohegan Gaming and Entertainment, by a creditor.
24-hour opening targeted
An ultimate aim of K-HIT 1.0 is to see the Kangwon Land gaming operation running 24 hours per day, seven days per week. Gaming is presently shuttered between the hours of 6am to 10am daily. Currently, mass-market casino table games – which are mostly patronised by locals – have bet limits of KRW300,000, circa US$205, imposed by the country’s Ministry of Culture, Sports and Tourism.
Kangwon Land is sometimes “as quiet as an abbey, and not as exciting as other casinos,” due to “such a low maximum bet amount” on mass tables, suggested Mr Kim.
Though he added: “Our strict surveillance against disruption and nuisance is another reason for that silence.”
Since the Covid-19 pandemic the property is “still in the process of recovering customers, but rather than saying that the direct effects of the pandemic are still present, it will take time to fully normalise due to changes in consumption patterns and increased competition from overseas casinos,” stated the manager.
“Customers no longer automatically visit Kangwon Land as they did during the pre-pandemic period.”
Mr Kim observed: “Although VIP consumers have returned to us – there were fewer than 30 VIPs before the pandemic but now over 50 – most of them are involved in finance or real estate, while mass players have been travelling abroad more.”
He added: “The Philippine and Macau casinos also seek South Koreans. Multiple Philippine casinos feature South Korean zones,” and domestic mass players were now “more likely” to fly overseas for their play, now that airline flight schedules had recovered.
Transport links patchy post-Covid
By contrast, Kangwon Land’s post-pandemic transport infrastructure has been slow to revive, said Mr Kim, with fewer national bus services connecting to the property than before. Kangwon Land is in a rural upland area three hours east of Seoul by road.
Kangwon Land’s ban in marketing to domestic mass-market and VIP customers was another barrier to business growth, the executive team’s general manager suggested.
Prior to the pandemic, GGRAsia’s South Korea correspondent had seen unauthorised resale at the property’s underground parking garage, of vouchers that had been meant as complimentary offers to existing on-site players.
Mr Kim told GGRAsia that “although there may still be some such resales, it is less active than the past”.
Reasons included first, “low profit margins for reselling comps; second, Kangwon Land’s enforcement, and third, consumers’ changing consumption patterns”.
He said many Kangwon Land customers were redeeming their ‘comps’ straight away on site, or at merchants in nearby places. This had made the circulation of complimentary offers more transparent, “which meant South Korean players are becoming more sophisticated.”
The company has been considering adding keno and bingo to its roster of gaming floor products but has not done it so far. Although those categories of game are among 18 formats licensed by the Ministry of Culture, Sports and Tourism for use in casinos, Mr Kim said Kangwon Land’s current venue was too small to add them.
Management is considering upgrading the venue’s bar area, so that customers could play bingo while drinking, in the manner of some casino bars in Las Vegas, suggested Mr Kim. Alternatively, bingo and keno might be added once a second gaming venue comes into use.
Of Kangwon Land’s live table games, currently, baccarat is the most popular among domestic players; with blackjack, and casino war next. Slot machines are less popular than table games, said Mr Kim.
