'Corona Darkness' Past Foreign Casinos... The Variable is 'Inspire'

Paradise, GKL, and Jeju Dream Tower See Performance Rebound
2019 Revenue Levels Recovered, Highest Since Opening
Rising Momentum Expected Amid Growing Competitors, Raising Concerns Over Diminished Effects

Foreigner-only casinos, which were hit hard by the COVID-19 pandemic, are emerging from a long period of darkness. Last year, the sales of casinos operated by Paradise and Grand Korea Leisure (GKL) recovered to the levels seen before the outbreak of COVID-19 in 2019, and the casino division of Lotte Tour Development's Jeju Dream Tower complex resort posted its highest performance since opening. With the transition to an endemic phase and the number of foreign tourists visiting Korea expected to recover to around 20 million annually, a full-fledged upward trend is anticipated. However, the opening of the Mohegan Inspire Entertainment Resort in Yeongjongdo, Incheon, last month, which plans to open a foreigner-only casino early this year, is expected to introduce variables to the competitive landscape.

Seven Luck Casino [Photo by Grand Korea Leisure (GKL)]

According to industry sources on the 3rd, Paradise's consolidated casino sales last year were tentatively estimated at 744.152 billion KRW, an increase of 112.8% compared to the previous year. This amount combines the sales of four casino venues operated by Paradise and its subsidiary Paradise Segasami (Walkerhill, Busan, Jeju Grand, and Paradise City). This recovered about 95% of the 784.87 billion KRW sales recorded in 2019 before the COVID-19 outbreak. The drop amount (the amount customers exchanged for chips) also increased by 114.2% year-on-year to 6.173349 trillion KRW, approaching the 6.755691 trillion KRW recorded in 2019. The company analyzed this as an effect of a significant increase in the proportion of Japanese VIP and mass (general) customers.

GKL, which operates Seven Luck Casinos in three locations including Gangnam and Yongsan in Seoul and Busan, also posted sales of 397.35 billion KRW last year, up 49.8% from the previous year. The drop amount rose 70.8% year-on-year to 3.394278 trillion KRW. Compared to 2019, sales (493.014 billion KRW) reached 80%, and the drop amount (4.546235 trillion KRW) reached 75%. GKL mainly recovered its performance through mass customers from China and Japan.

In addition, Dream Tower Casino posted net sales (amount after deducting agent commissions from total sales) of 152.37 billion KRW last year, an increase of 248.2% compared to the previous year. This is the highest annual performance since the opening of the complex resort in June 2021. The drop amount rose 154.2% year-on-year to 1.274816 trillion KRW. A Lotte Tour Development official explained, "With the transition to an endemic phase, the number of overseas direct flights to Jeju has expanded to about 156 flights per week, and the increase in overseas group tourists from Japan and Southeast Asia has significantly increased casino visitors and the drop amount."

The government plans to support the attraction of group tourists with a target of 20 million foreign visitors to Korea this year. This is also a positive issue for the foreigner-only casino industry. However, if Inspire Casino opens as scheduled within the first quarter of this year, it could pose a burden on the related industry. Some staff, mainly in dealer and marketing fields, have already moved to Inspire, causing a talent outflow, and there is a possibility that it will absorb a significant portion of the customer base. An industry insider said, "(Inspire) is expected to attract visitors through active promotions leveraging the effect of opening a new casino," adding, "In a situation where new demand is unlikely to flow in immediately, competition involving taking and losing existing customers is inevitable."