Kangwon Land has been granted a 20-year licence extension until 2045.
South Korea.- Kangwon Land’s licence has been extended for another 20 years until 2045 in return for a tax increase.
The licence for the only casino in South Korea that is open to nationals was to end in 2025 but has been extended in exchange for a payment of 13 per cent of gross gambling revenue to the Abandoned Mine Fund.
The new agreement replaces the current 25 per cent tax on profit before tax (PBT). According to the government, the change is to ensure that payments are made regardless of whether the company is profitable. It will effectively increase payments by around 43 per cent to KRW208bn.
Kangwon Land recently reported a net profit of KRW20.9bn (US$18.2m) for the second quarter of the year. However, its cumulative net loss for the first half amounts to over KRW19bn. For the previous quarter, the company reported a net loss of KRW40.9bn (US$36.6m) and sales of KRW97.4bn.
Kangwon Land has reduced its capacity again to 30 per cent of pre-pandemic levels due to an increase in Covid-19 cases in South Korea.
Kangwon Land to see improvement in the next quarter
JP Morgan Securities has predicted the casino operator will improve its operating profits in the next three months unless the social distancing gets tighter.
Analysts said: “Third-quarter mass/slot revenues should be 20 per cent above second quarter’s, while we project more than KRW25bn (US$21.7m) in operating profits in the third quarter of 2021.”