Last Friday, Korean media reported that the Seoul office of the National Tax Service (NTS) had launched a ‘high-intensity tax audit’ of Paradise, which operates four foreigner-only casinos, including the Paradise City integrated resort outside of Incheon. The NTS is reportedly building on a previous audit from 2017.
The media report of the Paradise probe came just two days after a possibly related NTS announcement of 38 suspected tax-dodging entities. Paradise confirmed the existence of the probe to GGRAsia but claimed not to know “the exact purpose” of the investigation.
Like most Korean casino operators – except Kangwon Land, the only venue that permits local residents to gamble – Paradise has suffered as a result of COVID-19’s sharp reduction in international tourist arrivals.
Last week, Paradise reported its October sales hitting KRW22.36b (US$19.7m), a 72.2% fall from the same month last year although 9% better than September 2020’s result, which was itself 20% better than August. October’s month-to-month increase came despite table turnover falling 7.7% from September.
For the year-to-date, Paradise’s sales are down 56.3% to KRW283.3b, with table revenue down 57% to KRW261.6b and machine gaming off 42.4% to KRW21.7b.
Meanwhile, the three foreigner-only casinos operated by Grand Korea Leisure (GKL) reported sales of KRW11.1b in October, an 18% improvement from September but a nearly 70% year-on-year decline.
GKL’s sales over the third quarter of 2020 were down 74% to KRW34.7b, although this represented a nearly 50% rise from the second quarter, during which GKL’s casinos were closed for the entire month of April.
For the year-to-date, GKL’s sales are down 53% to KRW169.6b, resulting in an operating loss of KRW31.6b for the state-owned company versus a KRW30.6 operating profit in the first nine months of 2019.