Odds are on Korean casinos as gamblers return

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Odds are on Korean casinos as gamblers return

Korean casinos are proving that the house does always win, with sales picking up in January and February following a difficult 2017 as the industry suffered from the loss of Chinese customers.

Statistics from the Korea Casino Association showed that 16 Korean casinos raked in sales of 204.8 billion ($191.7 million) won between January and February. This is a 15.9 increase year-on-year. The number of foreign customers slightly advanced 1.6 percent to 366,000 people.

In Korea most casinos only serve foreign customers as it is illegal for Koreans to gamble. The only exception to the law is Kangwon Land, a public company.

The increase was backed by a growing number of Japanese gamblers. The number of Japanese customers in January rose 5.2 percent year-on-year to 42,400 and 3.9 percent to 35,000 in February.

Chinese visitors declined 3.2 percent year-on-year to 89,700 people in January and 5.2 percent to 79,500 in February.

Last year the 16 casinos open to foreigners generated 668 billion won, 3.9 percent down from 2016. Soured relations between Korea and China over the installment of the U.S.-led Thaad antimissile system drove Chinese customers to other casinos in Macau, the Philippines and Vietnam.

Chinese VIPs are known for having deep pockets, not only in Korea, but casinos all over the world. Beijing’s apparent economic retaliation regarding tourism mainly focused on stopping group tours to Korea, meaning affluent Chinese VIPs who travel on their own wouldn’t technically have been directly restricted.

Nonetheless, industry insiders say that the Chinese government’s anti-Korea sentiment made it difficult for individual travelers to choose Korea over other Asian countries with casinos.

The rise of Japanese gamblers is likely the result of active marketing and sales activities to attract VIPs from the country, combined with a more vibrant economy. Korean casino representatives have been actively running promotional events in Japan for years. In 2015 several casino employees were arrested in China, where gambling is forbidden, for attempting to lure VIPs to Korean casinos - as a result, many casinos shifted their gaze to Japan.

At Paradise’s four casinos, 37 percent of the chips were changed by Japanese VIPs. The company saw 19 percent more sales year on year during the first quarter at 149.3 billion won.

However, some experts say it’s too early to say that the industry is immediately reviving.

“Monthly casino sales can be influenced by a few VIPs and also on how much they won or lost that month,” said an industry source. “It’s true that sales are getting better but from a wider perspective this can’t really translate to a revival of the entire market because the increase is based on the fact that last year’s sales were catastrophic.”

Casinos could be in for more good news, as more Chinese tourists are returning to Korea. According to government data, the number of Chinese visitors to Korea in March surpassed 400,000 for the first time since February 2017.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
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