South Korea’s largest casino operator Paradise Co. Ltd suffered yet another multi-million loss in the second quarter of the year despite the opening of its newest casino resort Paradise City.
In a disclosure to the Korean Composite Stock Price Index, the casino operator incurred an operating loss of KRW27.3 billion (US$24.24 million) in April to July 2017 period against KRW32.8 billion ($29.31 million) a year earlier.
Total sales revenue of Paradise Co. plummeted 26 percent to KRW139.9 billion ($124.3 million) in the second quarter, with casino sales tumbling to 31.1 percent to KRW114.9 billion ($102.05 million).
The company attributed the dismal performance of their gaming segments to weak VIP luck, as well as a decline in the number of Chinese VIP customers following a diplomatic row between South Korea and China.
Since March, South Korea’s casinos have suffered from the ongoing diplomatic spat between South Korea and China – Jeju’s traditional main supplier of international tourists – over the deployment of a US anti-missile missile system. Bejing, which traditionally sides with North Korea in international disputes, subsequently put the kibosh on group tours – by air or sea – to Jeju.
Data from the Korea Tourism Organization showed that the number of Chinese visitors to South Korea – an important source of customers for foreigner-only South Korean casinos – fell 41 percent year-on-year in the first six months of 2017.
This explains why Paradise Co posted a table drop of KRW 1.12 trillion ($994 million) for the second quarter, compared to KRW1.20 trillion ($1.06 billion) in the prior-year period. Chinese VIP patrons to the firm’s casinos accounted for 34.8 percent of the total table drop in the April to June period, according to Tuesday’s statement.
In the second quarter of 2016, Chinese VIPs had accounted for 50.6 percent of the total table drop in that period.
The revenue results were collated from Paradise’s four foreigner-only casinos: Walkerhill in Seoul; Jeju Grand on Jeju Island; Busan Casino in the southern port city of Busan; and Paradise City, in Incheon, near the main international airport serving the country’s capital Seoul.