Paradise, GKL, and Other Foreigner-Only Q3 Earnings Up
Increase in Japanese and Chinese Visitors, Drop Amount Rise Effect
Domestic-Allowed Kangwon Land Sees Operating Profit Decline YoY
Illegal Gambling Market Expansion Due to July Heavy Rain
The financial results of major domestic casino companies showed mixed outcomes in the third quarter of this year. Foreigner-only casinos such as Paradise and Grand Korea Leisure (GKL) showed clear signs of recovery due to the endemic transition effect (periodic outbreaks of infectious diseases) that began in earnest in the second half of last year. However, Kangwon Land, which allows entry to domestic customers, did not enjoy the seasonal peak and posted disappointing results.
According to the Financial Supervisory Service's electronic disclosure system on the 9th, Paradise reported an operating profit of 57.1 billion KRW on a consolidated basis for the third quarter of this year, a 49% increase compared to the same period last year. This is the highest quarterly operating profit to date. Revenue also increased by 50.7% year-on-year to 285.6 billion KRW, and net profit rose by 2.5% to 43.7 billion KRW.
The casino division, the company's core business, led the performance improvement with sales of 115.8 billion KRW, up 62.1% from the same period last year. This is attributed to the steady increase in Japanese visitors since the resumption of visa-free policies between Korea and Japan in October last year, and the effect of China allowing group tours to Korea from August this year. The drop amount (the amount of cash converted into chips by casino customers) collected by Paradise in the third quarter was 1.668 trillion KRW. Among this, Japanese VIP customers spent 750 billion KRW, and Chinese VIP customers spent 257 billion KRW, with the two countries accounting for more than half of the total. A Paradise representative stated, "In the casino sector, the trend of increasing drop amounts continues for both VIP and mass (general) customers."
GKL also saw its third-quarter operating profit increase by 200.2% year-on-year to 13.7 billion KRW. Revenue rose by 29.8% to 96.6 billion KRW, and net profit increased by 140.6% to 12 billion KRW. GKL also benefited from Japanese and Chinese visitors. Among the total 530,000 visitors during this period, about 135,000 were Japanese and about 245,000 were Chinese. Notably, the share of Japanese visitors increased by 22.5 percentage points from 3.1% in the same period last year. A GKL representative said, "To expand overseas VIP customers, we are strengthening local marketing activities in Tokyo and Osaka, and plan to hold events targeting VIP customers from the Chinese-speaking region."
In contrast to the upward trend of these foreigner-only casinos, Kangwon Land, the only casino in Korea that allows both domestic and foreign customers, posted an operating profit of 91.8 billion KRW in the third quarter, down 22.7% from the same period last year. Revenue also fell by 5.9% to 374 billion KRW. During this period, the number of casino visitors was 642,362, a 2.7% decrease year-on-year, and the total drop amount was 1.4689 trillion KRW, down 12.7%.
The securities industry analyzed that the decline in visitors was due to the heavy rains in July and the expansion of the illegal gambling market after COVID-19, which led to a decrease in demand at Kangwon Land's casino. Eun-kyung Park, a researcher at Samsung Securities, said, "The number of visitors to Kangwon Land has remained at about 85% of the 2019 level over the past year and has not recovered further," adding, "Although the government has recently shown a strong will to crack down on illegal gambling, it will take time for actual measures to be implemented and for the results to lead to an increase in visitors to Kangwon Land."
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