On November 8, Grand Korea Leisure Co Ltd (GKL) announced that profits for the third quarter of 2019 was at KRW25.29 billion (US$21.9 million), 4.1% less than what the company reported for the same quarter last year. This, despite the fact that the South Korean casino operator reported a 2.3% increase in overall sales for the third quarter in comparison to that of last year.
The gambling market in South Korea continues to expand and provide prosperous opportunities for other operators. Early last week, Paradise Co. announced a 15.4% increase in revenue for the month of October, posting an overall revenue of KRW80.90 billion ($69.8 million). That was the eighth straight month that they have increased their revenue over the prior month.
However, that is not the case at GKL. They report just a 1% increase in casino sales in October in comparison to sales in October 2018. That saw the company earn KRW36.45 billion ($31.4 million) from their casino sales.
The 1% increase from the prior year is still positive, but that is an 8.9% decrease in revenue from September. Also, while table game sales increased by 3.8% over October of last year, machine game sales decreased remarkably, falling by 18.1%.
This has continued to be a tough year for Grand Korea Leisure which saw their net profit from the second-quarter fall by 26.2% over last year’s second-quarter results. Sales increased by 1% over the same period in 2018.
Also, of concern has been the fact that sales to the first 10 months of 2019 have fallen by 2.0% over the same 10 months in 2018. The total sales fell to below KRW396.58 billion, and there appears to be no change in fortunes on the horizon.
Of growing concern is that the company had no direct response as to why the decrease in revenue is occurring. The market in South Korea seems to be amenable to casino providers, particularly considering how well that Paradise has been doing.
There is not a significant difference between the two organizations. GKL runs three different casinos in the Seven Luck Chain. Two are in the South Korean capital of Seoul while the other is in Busan. Paradise Co. runs four different operations, yet they are showing dramatic increases in sales and revenue.
Back in August, the company reported that they were able to turn things around July, showing an 11.4% increase in revenue over that in June, but the momentum is clearly not been carrying forward. This could be putting some pressure on new CEO Yoo Tae-Yeol to start making some dramatic changes.