Kangwon Land, the only casino in South Korea at which locals are allowed to gamble, roared back to life in the three months to 30 June 2022, led by impressive business volumes in its mass gaming segment.
Gross gaming revenue climbed 51.5% year-on-year and 45.0% sequentially to KRW308.8 billion (US$237 million) for the quarter, with mass tables up 69.3% to KRW140.1 billion (US$108 million) and slots up 80.5% to KRW133.6 billion (US$103 million). This more than made up for a 25.5% decline in VIP gaming to KRW35.0 billion (US$27 million).
Non-gaming sales also jumped 58.9% year-on-year to KRW31.4 billion (US$24 million) although they were slightly down on Q1.
Net profit of KRW37.5 billion (US$29 million) was 79.6% higher than the same period last year and reversed a KRW5.8 billion (US$4.5 million) loss in the March quarter.
JP Morgan analysts DS Kim and Livy Lyu said the results suggested Kangwon Land would soon exceed 2019 levels, “given how fast demand has recovered since easing of COVID-related curbs.”
“Mass GGR (including slot) printed an impressive recovery to 90%+ of the pre-COVID level, despite the fact that COVID-related curbs were only fully lifted in mid-May, while VIP GGR stayed weaker at ~60% recovery.
“This suggests the exit rate for mass GGR was already beyond the pre-COVID level, reflecting significant pent-up demand for gaming, similar to what we saw in the other major markets such as the US and Singapore.”
Noting that drop amount showed a faster recovery than visitation, the analysts pointed to, “a meaningful uplift in spending per player, which again is similar to our observations in other major markets.
“We think this is very encouraging, especially for a capacity-constrained casino like Kangwon Land,” they said. “Also note, Kangwon Land’s current gaming capacity is 20%+ above the 2019 level with extended operating hours and more mass tables, giving us more comfort here.”