Scientific Game

Korea’s Kangwon Land ordered to reduce tables, opening hours

Thursday, 04 January 2018 03:20
Visit us

South Korea’s Ministry of Culture, Sports and Tourism has ordered Kangwon Land – the only casino in the country where locals are allowed to gamble – to reduce both the number of mass market tables in operation and its daily operating hours.

The directive, which came into effect on 1 January, is part of the government’s new Gaming Industry Reform Plan and sees the maximum number of mass tables Kangwon Land is allowed to operate reduced from 180 to 160. Opening hours have also been reduced from 20 hours per day to 18 hours per day.

In a note sent to Inside Asian Gaming, JP Morgan analysts DS Kim and Sean Zhuang state that the Gaming Industry Reform Plan announced by the Prime Minister’s Office on 14 December “clearly points to further regulatory tightening and increasing oversight on local gambling” and includes four major initiatives, “one of which effectively targets Kangwon Land by redesigning the Revenue Cap Policy with heavier penalties and stricter legal enforcement.”

Korea’s Revenue Cap is designed to regulate legalized gambling industries in Korea by setting an acceptable maximum level of gaming demand with the revenue cap for the entire gambling industry combined calculated as a proportion of GDP (currently 0.54%) and allocated across the seven different industries. Kangwon Land is the only one of the seven industries – which also includes horse racing, bicycle racing, boat racing, lottery, bull fighting and sports toto – to have violated the cap in recent years.

According to JP Morgan, the government’s latest directive on opening hours could see Kangwon Land’s revenue fall by around 10% in 2018.

“Recall, Kangwon Land had already reduced its active capacity on the main floor to ~130 tables during 2017 given the company’s efforts to ‘curb revenues’ amidst regulatory pressure; hence the cut on table capacity shouldn’t have any impact for now, in our view,” the note said. However, “the changes in opening hours should have some direct impact (up to 10%, if we simply assume Kangwon Land's revenue is evenly split during operating hours), though it’s difficult to assess accurately at this point without knowing how the ‘break-time’ would change (current break-time is 6am to 10am) and from when.”

Kim and Zhuang noted previously that even if the Gaming Industry Reform Plan failed to pass the National Assembly, Kangwon Land would likely continue to lay low.

“Our read on the government’s Gambling Industry Reform Plan points to further regulatory tightening and increasing oversight of local gambling, possibly throughout this administration, and we believe Kangwon has no choice but to keep curbing its revenues to avoid further scrutiny for a (good) while,” they said.

“Even in the medium term, we believe management is unlikely to allow its business to grow faster than GDP (which can be seen as a maximum politically acceptable level of growth for gambling), hence we feel it is reasonable to assume its growth potential is effectively ‘capped’ at ~3% per annum at best, possibly throughout this administration until 2022.”

What's new

Stars align for Silver Heritage as Tiger Palace Resort’s Grand Opening draws record crowd

Stars align for Silver Heritage as Tiger Palace Resort’s Grand Opening draws record crowd There was a full-scale Bollywood party going on inside Tiger Palace Resort on Saturday night but it was owner and operator Silver Heritage Group celebrating the hardest afterwards with the huge crowd and fully booked hotel seeing revenue records tumble. Silver Heritage might not have planned on spe... Sunday, 18 March 2018 17:08

Sands China declares HK$1.00 final 2017 dividend

Sands China declares HK$1.00 final 2017 dividend Sands China has declared a final dividend of HK$1.00 per share for the year ended 31 December 2017, subject to approval at the company’s upcoming AGM. If approved, the proposed final dividend will be paid on Friday 22 June 2018. Sands China previously announced net revenues of HK$60.3 billion (U... Sunday, 18 March 2018 08:17

Imperial Pacific to ask for more time to complete Saipan resort

Imperial Pacific to ask for more time to complete Saipan resort Saipan casino operator Imperial Pacific International (IPI) could ask for a further extension on its time frame for completion of Imperial Pacific Resort, according to Executive Director of the Commonwealth Casino Commission Edward Deleon Guerrero. As reported by Marianas Variety, Guerrero met with... Saturday, 17 March 2018 18:58

VIP soars past mass in 2017 to claim 65% of NagaWorld revenue share

VIP soars past mass in 2017 to claim 65% of NagaWorld revenue share VIP gaming has taken over from mass as the primary revenue source for Cambodian integrated resort NagaWorld, with 65% of all revenue coming from VIP in 2017 compared to just 42% in the previous year. The breakdown forms part of NagaWorld owner and operator NagaCorp’s 2017 annual report, released ... Saturday, 17 March 2018 14:50

Current Issue

MGM “all-in” on Cotai

MGM “all-in” on Cotai Almost five years to the day since MGM first broke ground on its second Macau integrated resort, MGM Cotai finally opened its doors to the public on 13 February with the US$3.4 billion investment pinning its future on the premium mass market and an array of innovative features. By Ben Blaschke “... Tuesday, 27 February 2018 14:50

European vacation

European vacation Novomatic is targeting both the US and Asian markets with its recent acquisition of a 52% stake in Australian slot machine developer Ainsworth Game Technology.By Ben Blaschke WHEN Austrian gaming giant Novomatic Group confirmed the completion of its AU$500 million purchase of a 52.2% stake in Austra... Tuesday, 27 February 2018 14:48

Problem solving

Problem solving Inside Asian Gaming speaks with Davis Fong, Associate Professor in International Integrated Resort Management and Director of Institute for the Study of Commercial Gaming at the University of Macau’s Faculty of Business Administration, about the extent of gambling disorders in the Asian gaming hub... Tuesday, 27 February 2018 14:44

Gaming and the nine intelligences

Gaming and the nine intelligences Sudhir Kale explores the nine types of intelligence as defined by Harvard psychologist Howard Gardner and how they apply to the gaming industry.  DURING my decades of involvement in the gaming industry, I have had the pleasure of knowing many senior executives from all over the world. They are all... Tuesday, 27 February 2018 14:40