South Korean casino operator Grand Korea Leisure (GKL) enjoyed solid gains in Q3 while rival Kangwon Land continues to struggle.
GKL, which operates three Seven Luck foreigner-only casinos (two in Seoul, one in Busan), reported revenue of KRW 138.7b (US $124.5m) in the three months ending September 30, a year-on-year improvement of 3.5%. But operating income jumped nearly 18% to KRW 40.7b and profit spiked more than one-fifth of KRW 33.4b.
GKL’s brief filing with the Korean exchange didn’t explain the disparity between its modest revenue gains and its much-greater improvement in earnings and profits, so we’re just going to guess that GKL found a big wad of cash buried in its VIP sofa cushions and leave it at that.
Meanwhile, Kangwon Land was headed in the opposite direction, reporting revenue down 9.8% to KRW 395b, operating income down 15% to KRW 137.6b and profit off 4.3% to KRW 119b. For the year-to-date, Kangwon Land’s profits are down more than 8% to KRW 359.2b.
Kangwon Land is currently the only South Korean casino in which local residents are allowed to gamble. That status has traditionally allowed it to outperform all the other foreigner-only casinos combined, but it has also brought extra scrutiny as to what effect its operations are having on the nation’s problem gambling statistics.
The Health Insurance Review and Assessment Service recently reported that there’d been a surge in the number of younger South Koreans seeking medical treatment for problem gambling behavior. Of 1,100 individuals who sought treatment last year, 71.3% were in their 20s and 30s, compared to just 51.6% in 2012.
Meanwhile, the government proved it holds the ultimate house edge by generating tax revenue of KRW 174.2b from gambling in 2016, of which KRW 140b came via casino, KRW 27.4b came via horse racing and KRW 6.9b from boat racing. A further KRW 1.5t came via lottery sales. Total ‘sin’ taxes on products such as gambling, liquor and tobacco came to KRW 18.5t.
