South Korea’s Casino Industry Set To Get Big Boost With Increase In Chinese Gamblers
- A Korean brokerage predicts sustained recovery for South Korean casinos in the second half of 2023
- There will be strong results in the mass market segment in particular
- Paradise Co Ltd is likely to enjoy the biggest mass market growth
South Korea’s casino industry will continue to recover in the second half of 2023 as Chinese tourists begin returning to the country, according to Korean brokerage NH Investment & Securities Co Ltd. Chinese visitor numbers are now starting to pick up after China lifted its zero-COVID policy in December 2022.
Casino Industry To See Boost In Second Half of 2023
Casino operators in South Korea have reported strong results since January this year, despite challenging economic conditions, said Hazell Lee, an analyst at NH Investment. With the return of Chinese patrons, the industry is expected to enjoy sustained recovery in the second half of the year, particularly in the mass market segment. This is because most of the Chinese visitors coming to the country are mass customers, Lee added.
Gambling markets like South Korea have seen a decline in Chinese VIP customers over the last few years after China intensified its crackdown on cross-border gambling, targeting high-roller gamblers. Under amendments to the country’s criminal law which took effect in March 2021, individuals involved in organizing overseas gambling trips for Chinese nationals could face prison terms of up to 10 years.
The majority of the casino operators in South Korea recorded solid results during the first quarter of the year, including Paradise Co which reported a net profit of KRW6.99 billion (US$5.3 million) from January to March 2023, reversing the company’s losses of KRW4.05 billion in Q4 of 2022.
Kangwon Land Inc., the only casino operator that is allowed to cater to local players, also recorded KRW101.54 billion net profit in the first quarter of the year, up from KRW9.22 billion in the prior quarter. Grand Korea Leisure Co Ltd posted positive results as well, with a net profit of almost KRW21.60 billion in Q1 of 2023, compared to a net loss of KRW8.95 billion in Q4 of 2022.
Paradise Co Ltd to Enjoy Highest Mass Market Growth
The Q1 results of all three operators also represent a strong year-on-year growth as each of them recorded billions in losses during the first quarter of last year.
The only casino that has yet to recover is the Jeju Dream Tower on Jeju Island, operated by Lotte Tour Development Co Ltd. The company’s net losses increased from KRW1.01 billion in Q1 of 2022 to KRW2.19 billion in Q1 of 2023.
Among all the operators, NH Investment predicts that Paradise Co Ltd, which operates the Paradise City integrated resort on Yeongjong Island, Incheon, will enjoy the biggest growth in mass market revenue, as it has a “competitive edge” in drawing mass market customers.