Kangwon Land, the only South Korean casino at which locals are permitted to gamble, saw its net profit fall by 11.9% quarter-on-quarter to KRW89.5 billion (US$68.4 million) in the three months to 30 June 2023, impacted by higher expenses and decline across all three gaming segments.

While gross gaming revenue increased by 3.7% compared with the same period in 2022 to KRW320.2 billion (US$245 million), it was down by 4.9% on the March 2023 quarter. Mass tables grew 13.0% but fell 5.5% sequentially to KRW158.3 billion (US$121 million), VIP Membership Club revenues fell by 24.0% year-on-year and 12.5% sequentially to KRW26.6 billion (US$20.3 million), and slot machines grew 1.2% year-on-year but fell 2.5% sequentially to KRW135.2 billion (US$103 million).

Non-gaming sales of KRW36.8 billion (US$28.1 million) was down 29.4% on Q1.

While operating profit grew 17.3% year-on-year and 17.7% quarter-on-quarter to KRW82.0 billion (US$62.7 million), costs including contributions to the abandoned mine fund and tourism fund plus other fees and taxes grew by a combined KRW7.1 billion (US$5.4 million) year-on-year. Corporate tax also increased by 173% to KRW31.8 billion (US$24.3 million).

In a recent note, investment bank JP Morgan observed the slower than expected recovery of Kangwon Land post-COVID, with demand having flat-lined for three consecutive quarters and little signs of a turnaround even a year after reopening.

Analysts DS Kim and Shi Mufan Shi attributed this slowdown to the proliferation of illegal and grey-market gambling such as cash play at “Hold’em” pubs as well as online casinos.