South Korea may have plenty of casino-hotel resorts on Jeju Island, but when it comes to domestic options, South Koreans have one casino they can visit. Kangwon Land Casino 93 miles outside of Seoul is the only option. Despite it being the only place near Seoul, the casino is not showing high profits for the first quarter. Kangwon Land Casino is not the only casino reporting low profits, in February Grand Korea reported lower than expected profits.
The company experienced a 30 percent decline for the first three months of 2018. The filing was sent to the Korea Exchange to show a net income of $71.1 million for quarter one. The year-on-year sales also dropped 7.5 percent, while operating income was down 22.4 percent. The operating income reported was $118 million.
According to the information the drops in revenue for Grand Korea and Kangwon Land Casino are a pattern. In the last twelve months, profits have not been as high. The ban on South Korea, China imposed due to troubles between the North and South, are mostly blamed for the drop in revenue at the various casinos.
JP Morgan Securities in Asia stated last Friday that the decline is representative of challenges in the gambling industry. Kangwon Land is suffering from political pressure to slow its revenue growth. Many do not like having the casino on the mainland or that it allows domestic players.
Sean Zhuang and DS Kim, from JP Morgan, stated the company is attempting to open a waterpark in July. The cost pressures will keep the revenue low and probably affect 2019 earnings.
Gross Gaming Revenue Details
Kangwon Land has a gross gaming revenue of $341 million, which is an eight percent drop from 2017. The VIP sector has also been extremely low with a 22 percent drop, which has the earnings as low as they have been in four years. There is no demand for the casino, which makes it tougher to get the whales to come.
The casino has also been stunted by a few setbacks. The South Korean government asked the casino to fire 226 employees when an investigation showed they were hired unfairly. The mass tables had to go from 180 to 160 due to a government demand.
Additionally, the government has requested the operating hours of the casino change at the beginning of April, so the casino is only available 10am to 4am, instead of until 6am. Despite being the largest of the 18 casinos, in Korea, they are facing struggles due to pressure.