South Korea’s Kangwon Land Casino posted an increase in turnover of 5.8 percent in 2013, good for 1,279 billion won (US.25 billion).
Admissions at the casino, the only one in the country open to Korean nationals, were up slightly last year (1.4 percent) to 3 million; and despite its remote location in a depressed former coal-mining region in the far northeast of the country, the property has managed to grow turnover 10.7 percent since 2009, according to new figures from the Korea Leisure Industry Institute, a government-sponsored think tank.
Although legal sports betting and lotteries have far surpassed that pace with rates of growth of 75.5 percent and 30.9 percent, respectively, over the same period, the 18,284.7 billion won generated from all forms of domestic gambling last year was essentially flat with 2012. Revenue from pari-mutuel betting on cycling and boat racing declined by 7.4 percent and 4.3 percent, respectively, and attendance was down 16.3 percent and 13.2 percent. Lotto sales, which account for 17.7 percent of the total domestic market, rose 1.5 percent last year to 3,234 billion won.
The institute didn’t factor in the 16 casinos open to foreigners, whose combined annual revenues historically have approximated Kangwon Land’s. Two companies, privately held Paradise Group and government-backed Grand Korea Leisure, control about 90 percent of the take, split roughly between them. Neither has shown especially robust growth, however. Grand Korea Leisure, which is publicly traded, reported a 4 percent increase in revenue in the fourth quarter, but that was attributed mostly to above-average hold, as table drop was down 13 percent and fewer Chinese and Japanese high rollers patronized its three properties in Seoul and Busan. Operating profit was up 30 percent, but higher expenses resulted in an 11 percent decline in net profit.
The government, which generally is cool to gambling, has more recently come around to recognizing the value of the industry as a tourism driver and a source of foreign investment and has designated a special economic zone around the main international airport near Incheon for large-scale casinos. Paradise is developing a gaming resort there with a hotel and supporting attractions in partnership with Japanese pachinko giant Sega Sammy, and a joint venture led by Las Vegas-based Caesars Entertainment has won tentative approval to build in the zone.
The number of foreign visitors to South Korea rose 9.3 percent year on year in 2013 to 12.2 million, according to the government’s Korea National Tourism Organization. Chinese tourists accounted for 30 percent of all visitors to the country, and they are the principal target market for both Incheon projects.
The same goes for the island of Jeju in the far south, an increasingly popular destination for Chinese travelers, and a joint venture led by Genting Singapore and including Chinese developer Landing International has been approved to develop a mixed-use resort on the island with a casino. Genting says the property will be modeled on its Resorts World Sentosa, and it plans to break ground in the third quarter with a view to opening in phases beginning in 2017.
