Sega Sammy sees upside as Chinese return to Paradise City
Management at Sega Sammy Holdings Inc, a Japanese entertainment conglomerate, says it expects an upside if the number of Chinese visitors to its joint venture South Korean casino complex recovers. The company is an investor in Paradise City – a facility that includes a foreigner-only casino – in collaboration with South Korean casino operator Paradise Co Ltd.
The Sega Sammy group – which also makes casino electronic games, pachinko machines and home entertainment products – published last week a written translation into English of a presentation that the company gave to investors in July, around the time it reported its results for its financial first quarter ended June 30, 2019.
Among the patrons of Paradise City (pictured), Japanese make up the biggest single national contingent, according to Sega Sammy’s management.
The document quotes a Sega Sammy manager as saying in answer to a question about the nationalities of visitors to the South Korean casino resort: “Figures are based mainly on the number of VIP customers, but Japanese customers had the largest number, followed by Chinese customers, based on drop.”
“The most common class, excluding VIPs, also account for several tens of percent of the total number,” Sega Sammy’s management added.
Paradise Co on Tuesday reported a wider second-quarter loss, despite an increase in revenue supported by higher casino sales. The company said casino sales at Paradise City had hit “a record high” in the three months to June 30, reaching KRW86.35 billion (US$70.59 million), up 61.5 percent from a year earlier.
The South Korean company said second-quarter casino drop rose by 33.2 percent year-on-year, to nearly KRW1.85 trillion, backed by “recovering in China VIP” patronage.
According to Paradise Co, Japanese VIP customers accounted for 34.6 percent of the firm’s total casino table drop in the April to June period. Chinese VIP patrons to the firm’s casinos came in second place and accounted for 30.5 percent of the total table drop in the period, with their contribution increasing by 66.1 percent in year-on-year terms, to approximately KRW563 billion.
The transcript published last week quotes Sega Sammy’s management as saying about the prospects for the Paradise City business: “Before the opening of Paradise City, we expected many Chinese VIP customers to visit Paradise City, but issues between China and South Korea remain unsolved, and Japanese customers now cover losses from that.
“Short-term sales change according to table drop as well as the hold rate, but we believe that there will be an upside if the number of Chinese visitors to Paradise City recovers.”
Paradise Co runs three other casinos in South Korea: the Walkerhill in Seoul; the Jeju Grand, on the southern island of Jeju; and the Busan Casino in the southern city of Busan. Only foreign gamblers are admitted to these casinos.
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