Casino business recovery in South Korea should be helped in the second half of 2023 by the return of Chinese visitors to the country, particularly mass market customers. That is according to a report by brokerage NH Investment & Securities Co Ltd, cited on Tuesday in the Business Korea news outlet.
Analyst Hazell Lee said the casino industry in South Korea was enjoying “solid earnings” in the first half of the year, despite “worries” over a potential “economic slowdown”.
Recovery “should sustain” in the second half of 2023, helped by the return of Chinese clients, she added, in a reference to the end, earlier this year, of China’s zero-Covid policy and the subsequent relaxation of international travel restrictions.
Ms Lee stated that the “demand rebound” was likely to be centred around mass customers, “as China’s crackdown on VIP [gaming] continues”.
The Chinese authorities have continuously emphasised in the past few years a crackdown either on citizens travelling overseas for casino play, or being involved in online betting – referred to collectively as “cross-border gambling”. The country has amended its criminal code to outlaw anyone assisting others in such activity. It came into effect on March 1, 2021, amid the Covid-19 pandemic.
NH Investment said it favoured Paradise Co Ltd among the South Korean casino operators. That was due to that firm’s “competitive edge” in attracting mass market tourists, thanks to its Paradise City integrated resort (pictured in a file photo).
Several listed casino operators in South Korea disclosed earlier this month their respective first quarter results, with the majority showing strong year-on-year profit growth.
Paradise Co, an operator of foreigner-only casinos, reported net profit of KRW6.99 billion (US$5.3 million) for the first quarter. That was an improvement on the KRW4.05-billion loss in the previous three months, and on the KRW28.58-billion loss in the first quarter of last year.
Grand Korea Leisure Co Ltd, also an operator of foreigner-only casinos, posted a net profit of nearly KRW21.60 billion for the first quarter this year. That compared with a net loss of KRW10.78 billion a year earlier, and a KRW8.95-billion loss in the preceding quarter.
Kangwon Land Inc, promoter of Kangwon Land, the only South Korean casino resort permitted to let locals gamble, swung to a net profit amounting to KRW101.54 billion in the first quarter of 2023, compared to a net loss of KRW5.85 billion in the prior-year quarter. The profit for the three months to March 31 was up 1,001.6 percent on the KRW9.22 billion made in the fourth quarter last year.
An exception to the overall positive trend was the Jeju Dream Tower casino resort, on the South Korean holiday island of Jeju. According to the resort’s operator, Lotte Tour Development Co Ltd, the casino segment reported a first-quarter net loss of KRW2.19 billion. That compared to a first quarter 2022’s net loss of KRW1.01 billion.
