GGRAsia – Paradise Co Aug sales recover, still down y-o-y

Paradise Co Aug sales recover, still down y-o-y

Sep 07, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Casino sales at Paradise Co Ltd, a South Korean casino firm that runs venues in that country that are open to foreigners-only, rose 44.6 percent month-on-month in August. Such sales were however down 6.2 percent that month when judged year-on-year.

Paradise Co had seen its first half casino sales fall 14 percent year-on-year in the six months to June 30. But the rate of year-on-year decline in casino sales in June had reached 50.2 percent, the firm had said in a filing to the Korea Exchange on July 6.

The poor June performance coincided with what analysts have said was a fall off in tourism to the country that month in the wake of a nationwide health alert over an outbreak of Middle East Respiratory Syndrome, known as MERS.

Union Gaming Research LLC said in a note on Friday that Paradise Co’s numbers had bounced back from an unusually steep decline seen during the country’s public health emergency. The number of foreign tourists visiting South Korea fell 41 percent year-on-year in June according to government data.

“As we had anticipated, the devastating trends seen during the height of the MERS epidemic earlier this summer have seemed to revert back to their pre-MERS levels,” wrote Union Gaming analysts Christopher Jones, John DeCree and Grant Govertsen.

Nonetheless Paradise Co’s table game sales still dropped 7.6 percent year-on-year in August 2015 against the easier comparison of the August 2014 period.

Table game sales in August were KRW45.67 billion (US$38.1 million), compared to nearly KRW49.41 billion in the year-prior period. Sales via gaming machines rose 18.2 percent year-on-year in August, to KRW3.26 billion compared to KRW2.76 billion in the prior-year period.

August’s aggregate casino sales at Paradise Co were just under KRW48.94 billion, compared to nearly KRW33.84 billion in July. The August tally was down on the KRW52.17 billion achieved in the prior-year period.

For the eight months to August 31, Paradise Co’s aggregated casino sales were nearly KRW380.67 billion, a 14.0 percent decline on the prior-year period.

Paradise Co currently runs five foreigners-only casinos in South Korea, namely in Seoul, Incheon, Busan and Jeju. 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.

In August, mainland China news outlet China News Service reported that China’s Ministry of Public Security had started an operation called “Chain Break” – said to be aimed at disrupting foreign casinos’ access to money flows from China and those casinos’ links to individuals that scout for gamblers from China.

“The gambling money involved in the ‘Chain Break’ operation is said to be over RMB6 billion (approximately US$1 billion). We believe that the operation is targeting foreign (i.e., non-Macau) casino activities,” stated brokerage Sanford C. Bernstein Ltd in a note issued from Hong Kong on August 10.