South Korean casino operator Paradise Co Ltd reported casino sales of KRW37.2 billion (US$31.7 million) in September, down 34 percent from the prior-year period. The September tally was down 23.6 percent from August, the company said in a filing on Friday.
Paradise Co currently runs five foreigners-only casinos in South Korea, namely in Seoul, Incheon, Busan and Jeju.
Table game sales in September were KRW33.9 billion, compared to about KRW45.4 billion in the year-prior period. Sales via gaming machines rose 0.8 percent year-on-year in September, to KRW3.3 billion, the casino operator said.
Union Gaming Research LLC said in a note on Friday that July represented the “low water mark” for Paradise Co in terms of “both the absolute level of gaming volume as well as the magnitude of the year-on-year decline”, while gaming volume improved in August and September.
“We would attribute the rebound to the market quickly getting back to pre-MERS (Middle East Respiratory Syndrome) levels which devastated not only gaming trends but tourism trends in general,” the note added.
The poor July performance followed what analysts have said was a fall off in tourism to South Korea in June in the wake of a nationwide health alert over an outbreak of MERS. The number of foreign tourists visiting South Korea fell 41 percent year-on-year in June, according to government data.
For the nine months to September 30, Paradise Co’s aggregated casino sales were nearly KRW417.6 billion, a 16.3 percent decline on the prior-year period.
The casino operator posted a net profit of KRW12.65 billion for the second quarter of 2015, down by 47.1 percent year-on-year.
The analysts at Union Gaming said they still “expect year-on-year trends in the Korean gaming market to show declines,” which they attribute to “the same factors that are impacting Macau”.
The factors included “the continued effects of the anti-corruption drive, which have been made worse by a variety of other factors including Beijing directly targeting Korean casino marketing agents working in mainland China, the broader slowdown of the Chinese economy, the crash of the Shanghai stock market, etc,” they added.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia