S.Korea’s Paradise Co casino sales halve in June

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

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South Korean casino operator Paradise Co Ltd saw 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 reached 50.2 percent, the firm said in a filing to the Korea Exchange on Monday.

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.

The overall number of air travellers in the South Korea market plunged 19.5 percent year-on-year in the first three weeks of June, according to the Ministry of Land, Infrastructure and Transport.

Additionally on June 23, analysts at brokerage Sanford C. Bernstein Ltd in Hong Kong mentioned in a note there had been reports of a crackdown by Chinese authorities the previous week on some travel agencies in Beijing that promote South Korean casinos to mainland China gamblers.

Paradise Co’s casino sales for the first half of 2015 reached approximately KRW257.51 billion (US$228.7 million), a 14 percent decline on the nearly KRW299.36 billion in the prior-year period. Table game sales for the half fell 15 percent year-on-year to approximately KRW240.56 billion, from nearly KRW283.15 in first half of 2014. Machine game sales rose 4.6 percent in the first six months to just over KRW16.95 billion from nearly KRW16.21 billion.

But judged month-on-month, June’s casino sales for Paradise Co plunged. Such aggregate sales slipped 65.5 percent to nearly KRW20.19 billion, from KRW58.49 billion in May. Paradise Co’s June 2015 casino sales also slumped 50.2 percent judged year-on-year. Aggregate casino sales were just over KRW40.57 billion in June 2014.

The firm said the numbers are for gaming sales at Paradise Co’s casino division, compromising the properties Walkerhill, Seoul; Jeju Grand (pictured) on Jeju Island; and Incheon near Incheon International Airport.

Table game sales were the hardest hit sequentially in June this year, falling 67.7 percent to nearly KRW17.99 billion, compared to approximately KRW55.62 billion in May. Machine game sales fell 23.4 percent sequentially, to KRW2.20 billion, from approximately KRW2.87 billion in May.

Table drop – defined by the company as the amount of cash exchanged for chips by customers at the table – fell 49.7 percent month-on-month in June, to approximately KRW218.75 billion, from KRW434.62 billion in May.

Table drop for the first half was down 21.9 percent, to nearly KRW2.15 trillion, from approximately KRW2.75 trillion in the year-prior period.

Paradise Co’s casino business division accounted for 84.7 percent of the group’s consolidated sales in the year 2014, the filing added.

Fitch Ratings Inc said in a report published in late May that it had a “cautious view” on the South Korean casino industry’s foreigners-only venues in the light of likely competition from new or improved overseas properties.

South Korea’s national government said in January it was likely to approve two more foreigners-only casino licences this year to boost tourism.

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