Paradise Co., the owner of foreigner-only casinos in South Korea, reported a 13.5 percent increase in February revenue year-on-year, but sales slipped from the prior month and new Chinese travel curbs may further slow growth.
The company said in a Korean Stock Exchange filing that its February revenue was KRW 42.61 billion, boosted by table games, which recorded a 14.7 percent gain year-over-year and make up the bulk of the revenue at KRW 39.99 billion. Machine revenue dropped 1.4 percent from a year earlier.
However, the figures were all lower across the board from January, with overall casino revenue down 3.4 percent, table games down 2.7 percent and machines off by 12.8 percent.
The company also said its table game drop fell in February to KRW 380.25 billion from KRW 411.13 billion a year earlier.
The figures come from Paradise’s Walker Hill, Jeju Grand, Busan and Incheon casinos. The company is scheduled to open South Korea’s first major integrated resort next month in partnership with Japan’s Sega Sammy.
South Korea’s casinos have seen an improvement in revenue over the past year after being hit hard by an outbreak of Middle Eastern Respiratory Syndrome, which triggered a slump in tourism in 2015.
Gaming revenue in the country excluding foreigner-only casinos rose 7.7 percent to KRW 20.3 trillion. Including sales from foreigner-only casinos, sales stood at KRW 20.5 trillion, surpassing the KRW 20 trillion mark for the first time.
However, the casinos may face headwinds following curbs on Chinese tourism to the country. Local media has reported that the Chinese government has given verbal instruction to travel agencies to stop selling package products to Korea.
“Looking at the past cases of Japan and Taiwan, we believe Chinese inbound traffic and duty free sales could decline 24 percent and 8 percent year on year in 2017 and believe sentiment for Chinese tourism related companies will remain weak for the next four to five months,” CLSA wrote in a note.
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