South Korea casinos hit by Chinese ban

A ban on the sale of package tours from China to South Korea has hit foreigners-only casinos hard.

South Korea.- Last year the Chinese government banned the sale of package tours to South Korea and took other retaliatory measures against South Korean companies following the installation of a Terminal High Altitude Area Defense (THAAD) battery in southeastern South Korea. The measure has proven very harmful to foreigners-only casinos in South Korea which have taken a big hit from the tense diplomatic relationship.

In 2017, casino operator Paradise registered consolidated sales of €507 million, down 3.9 per cent from the previous year. That meant an operating loss of €22.8 million and also switched to a net loss of €24.5 million. This was mainly attributed to a drop in the number of Chinese visitors, which accounted for 35 per cent of VIP clients last year, compared with 45 per cent the prior year.

Meanwhile, Grand Korea Leisure Co. (GKL) – South Korea’s state-run casino operator – reported a revenue drop of 8.6 per cent year-on-year to €389.3 million last year. The company’s operating income tumbled 28.5 per cent to €138 million, with its net profit plunging 29.6 per cent to €61 million.

“Foreigners-only casinos fared far worse last year due to a decrease in the number of Chinese tourists. They are expected to have tough times this year unless China completely lifts its ban,” an industry expert said.

Despite the downturn, Chinese group tours have been allowed again after Seoul and Beijing set aside the dispute in November last year.