South Korean casino operator Paradise Co Ltd has confirmed its earlier projections of a significant VIP downturn in Q1.
In the first three months of 2015, Paradise reported revenue falling 11.2% to KRW 151.4b (US $139m) as gaming revenue fell 13% to KRW 131b and profit fell 20.5% to KRW 40.5b. The Korean Casino Association reported that Paradise’s share of the country’s overall casino market fell 4.2 points to 46.9% in Q1.
The decline was sparked by across the board dips in the number of international VIP gamblers crossing the thresholds at Paradise’s five foreigner-only casinos in Seoul, Incheon, Busan and Jeju. The ranks of Chinese VIPs were down 17% year-on-year while Japanese high-rollers were off 16%. On the plus side, VIPs from other countries were up 6.4% and mass market gambling table drop increased over 10%.
Things may improve for Paradise in Q2, thanks to expansions of the casino floors at its Walkerhill property in Seoul (set to grow 25%) and its Incheon property (30%). Daiwa Securities projected Paradise would return to growth by H2 2015. The Paradise City Incheon integrated resort joint venture with Japan’s Sega Sammy Holdings is on track to open in H1 2017.
CASINO CRUISES OFFER HOPE FOR LOCAL GAMBLERS
South Korean nationals are currently welcome at just one of the country’s 17 casinos but shipboard gambling may offer an alternative for gamblers tired of making the trek to Kangwon Land. In January, the government passed new legislation aimed at boosting the country’s struggling cruise ship business. On Thursday, the Ministry of Oceans and Fisheries announced that locals would be allowed to gamble in the casinos aboard these ships.
Anti-gambling critics are already raising hell, saying the government’s stated intention behind offering support to the cruise industry was to attract international clientele. But Maritime Minister Yoo Ki-june told a press conference that “consensus on [allowing locals to gamble onboard] has been formed to a certain level” and that the government plans to submit a revised version of the legislation to the National Assembly “soon.”
Korean news outlet Dong-a Ilbo quoted a government insider saying it cost KRW 4m (US $3,700) for a spot on a cruise ship, while gamblers could travel to Kangwon Land for a fraction of that price. As such, the government’s position is that “casinos on cruise ships are a leisure facility rather than a gambling facility.”
