On Wednesday, Kangwon Land informed the South Korean stock exchange that its revenue in the three months ending September 30 rose 6% year-on-year to KRW 438b (US $382.6m). Operating profit improved 2.4% to KRW 161.7b while net profit rose 4.5% to KRW 124.3b.
Kangwon Land is the only one of South Korea’s 17 casinos that is legally allowed to cater to local residents and Daiwa Securities Group believes the property’s recent gains are being “mainly driven by the growing number of casual gamers for mass-table games and new slot machines.”
Kangwon Land’s future earnings may take a hit from its plans to tighten problem gambling controls, which include new limits on how often locals can gamble at Kangwon Land’s tables and slots. The new measures came following criticism this summer by the country’s Board of Audit and Inspection that Kangwon Land owner High1Resort wasn’t doing enough to minimize the potential harms of gambling to justify its privileged position.
Some South Korean casino stocks suffered a dip last month after Bloomberg News reported a warning by South Korean tourism officials that Chinese authorities had ordered local travel agents to curb outbound tourism numbers by 20%. Specifically, travel agents were told to reduce cheap travel packages to South Korea between November 2016 and April 2017.
China accounts for nearly half of all tourist arrivals to South Korea. A recent report by analysts at brokerage group CLSA said Chinese tourists accounted for 60% of South Korean casino revenue. Kangwon Land is obviously less reliant on Chinese nationals than its local rivals, but a tourism curb will hurt, nonetheless.