The return of Chinese “general VIPs” and mass market customers is set to sustain the recovery of South Korea’s foreigner-only casino industry in 2023, even as genuine high-rollers are showing increasing scarcity on the back of China’s cross-border gambling crackdown.
The outlook was provided by NH Investment & Securities analyst Hazell Lee, as reported by BusinessKorea, who noted that concerns over a potential recession in South Korea has not impacted the entertainment and casino industries because they are ultimately backed by personal preferences.
Specifically, Lee said recovery should sustain on the back of the return of Chinese clients, although “as China’s crackdown on VIP gaming continues amid its policy for promoting common prosperity, demand rebound is projected to center on general VIPs and mass customers, rather than on high-rollers.”
Lee therefore recommends Paradise Co as her top pick because its Incheon integrated resort, Paradise City, gives it a “competitive edge in attracting tourists (mass clients)”
As reported by IAG, Paradise returned to profit in 1Q23 with revenues increasing significantly at all four of its foreigner-only casinos. With casino sales up 129% year-on-year to KRW71.0 billion (US$54 million), the company reported net profit of KRW9.45 billion (US$7.2 million), reversing a KRW36.0 billion (US$27.3 million) loss in 1Q22, and Adjusted EBITDA of KRW42.4 billion (US$32 million) also reversing a KRW1.45 billion (US$1.1 million) loss a year earlier.
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