South Korean casinos a good bet, Standard Chartered says

Monday 29th of September 2014

Standard Chartered says it’s upbeat over the outlook for the casino sector in South Korea, with gross gaming revenue at the foreigner-only casinos likely to quadruple through 2020 from a 2013 total of $1.3 billion.

Adding a further $1.25 billion from domestic players at Kangwon would put Korea "in the running for the world’s number three gaming market," behind Macau and the U.S., Forbes cited the U.K. bank as saying.

The reasons for optimism include the country's close proximity to three of the biggest economies in Asia, including its own. There has also been a rapid increase in Chinese arrivals, which over the past five years, have climbed from 1.3 million to 4.3 million.

In 2013, China supplanted Japan as Korea’s top visitor source. Chinese visitor arrivals continued to report strong gains this year with a 46 percent increase in the first seven months and are set to beat a projected 5 million for the full year. Backed by this growth, the Chinese accounted for 1.35 million visits to Korea’s foreigner-only casinos - about half of the total.

Standard Chartered expects growth to continue, with a 15 percent compound annual growth rate from China through 2016. The bank says Korea is seen as being a more convenient destination than Macau from cities in northern China, such as Shanghai.

Further development of the tourism sector with the opening of integrated resorts, will boost the market with VIPs in Korea enjoying a return of 20 percent of the bets returned in the form of benefits. This is double the rate they could expect to receive in Macau for similar levels of wagering.