Casino Stocks Expected to Strongly Recover When COVID-19 Eases

[Asia Economy Reporter Minji Lee] As expectations for the easing of COVID-19 grow, opinions have emerged that the casino industry’s performance and stock prices will recover most prominently. According to the Korea Exchange on the 14th, Kangwon Land has risen about 8% since the beginning of this year. Paradise also increased by about 17%. This appears to reflect the expectation that the casino industry could recover, supported by the outlook for COVID-19 easing.

Looking at the status of Asian casinos, movements to ease travel restrictions are emerging. In Macau, recently, quarantine measures have been lifted for mainland visitors who submit a negative COVID-19 test certificate, and the obligation to submit the certificate when entering individual casinos has also been lifted. In Singapore, since December last year, quarantine measures have been lifted for visitors from Taiwan who submit a negative COVID-19 test certificate.

Researcher Hwajeong Lee analyzed, “Movements to ease travel restrictions as the first step toward industrial recovery have been detected in both Macau and Singapore, the core countries of the Asian casino industry,” and added, “If the stance of neighboring countries changes, there is a valid possibility that domestic movements regarding travel restrictions will also change.”

The improvement of the casino industry is expected to begin through the easing of social distancing, the relaxation of travel restrictions between countries, and the generalization of vaccination. This is because discussions on easing travel restrictions such as Air Travel Bubbles (ATB) and quarantine shortening between countries with stable domestic situations are likely to take place only after each country’s domestic situation stabilizes. Although the introduction of ATB and quarantine period reduction plans are being pursued domestically, China and Japan, the major customer countries of foreigner casinos in Korea, have not yet been included.

Accordingly, it is expected that domestic casinos will be the first to recover sales. Researcher Lee said, “The recovery of Kangwon Land, a domestic casino, will appear first,” and added, “Although sales recovery for foreigner casinos is unlikely within this year, it is worth noting the reduction in deficit due to workforce restructuring possible as private companies.” The generalization of vaccination is expected to be possible in 2022. Researcher Lee said, “Based on this point in time, the limited operation situation of casinos will follow a normalization process,” and “Recovery will begin mainly with high rollers, the most inelastic demand group.”