NORTH ASIA 34
south korea
Foreigner only casinos seen struggling with tourism drop South Korea’s casinos reported a strong start to the year, though the country’s foreigner-only operators are again likely to suffer from a drop in tourist numbers as a result of the coronavirus.
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ocals are only permitted to gamble in to KRW490.8 billion. However, the company, which operates one remote property in South Korea, which generates more revenue that the the Seven Luck casino in Gangnam Seoul, the rest of the country’s casinos put together. Seoul Hilton and the Busan Lotte, said it had In recent years, operators in the country have noted a turnaround in the fourth quarter when been on a roller coaster ride, with the tourism net income gained 167.5 percent year-on-year market hit by the Middle East Respiratory and revenue rose 17 percent. That performance continued into January, Syndrome in 2015 followed by a travel ban by China over Seoul’s decision to deploy a U.S. when GKL posted a 58 percent jump in yearon-year net sales in January, lifted by its two air defence missile system in 2017. Now, after a positive year of operating results casinos in Seoul in particular. The total sales amount for GKL’s three in 2019, the sector looks likely once again to casinos in January 2020 suffer from the impact of was nearly KRW54.6 events beyond its control. billion (about US$45.9 Paradise Co., which The Seoul million). The Seoul operates four properties, Gangnam casino nearly saw its casino revenues Gangnam casino doubled its year-on-year increase 23.4 percent nearly doubled its sales, and Seoul Hilton year-on-year in 2019, reaching KRW 784.8 year-on-year sales, Casino also turned in an impressive advance. billion (US$673.1 million). and Seoul Hilton The Busan Lotte Casino, For January, the positive trend continued with a Casino also turned however, reported only modest gains. Table 28.3 percent jump. in an impressive games contributed The company’s results far more to the sales are being helped by advance. increase than did the revenue from its Paradise slot machine segment. City integrated resort, Both of the foreignerwhere sales were up 51.2 percent last year. For January, the IR accounted only casinos chose to bar tour groups from China into their casinos, even though the government for half of group revenue. Paradise City is a joint venture with has not imposed an all out ban. Paradise Co., Japan’s Sega Sammy and was the first true which stopped accepting Chinese as of Jan. integrated resort to open in South Korea in 27, said however that most of its customers an area designated as an entertainment hub are individual VIPs and not package tourists. The company warns on its web site that close to Incheon International Airport, one lines have been set up to channel visitors toward of the busiest in the world. The company also operates the Paradise thermal scanning points for body temperature Walker Hill casino in Seoul, the Paradise Casino checks before they enter the gaming tables. GKL, a unit of the Korea Tourism Organisation, Busan and the Paradise Casino Jeju Grand. Rival foreigner-only group Grand Korea has also put a similar policy into place. As of Leisure reported a 6.9 percent drop in profit going to press, the South Korean government to KRW72.4 billion (US$61.2 million) in has only barred entry to non-Koreans who had 2019, while annual revenue rose 2.2 percent visited Hubei province, where Wuhan, the city
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Asia Gaming Briefings | March 2020
at the epicentre of the outbreak, is based. The Korea Institute for International Economic Policy has estimated that the virus may lead to a drop of 15 percent in tourism this year. In a report cited by Yonhap News, the institute noted Chinese visitors accounted for 39 percent of all foreign visitors to South Korea between January and November 2019, while their average spending far exceeded that of tourists from other countries at US$1,887 to $1,342 per person. A drop in the number of Chinese tourists by 1 million may lead to an annual reduction of up to $2 billion in tourism income for South Korea, it added. Meanwhile, Kangwon Land, the casino and resort company based in Gangwon Province that uniquely allows locals to gamble, reported full-year profit in 2019 was up 12.7 percent. With sales at KRW1.52 trillion (about US$1.28 billion), which was up 5.7 percent year-on-year, combined with lower costs, net profits for the year came in at KRW335 billion (about US$281 million).
