Kangwon Land sees casino sales on the rise but full table capacity still some way off

March 17, 2022 South Korea Earnings & Filings

Kangwon Land has seen a significant increase in both daily casino sales and visitor numbers this month after being granted permission to extend its operating hours by an hour.

According to a note by Shinhan Investment Corp, Kangwon Land – the only casino in South Korea at which locals are permitted to gamble – has been allowed to open for 13 hours a day since 5 March, having previously seen its daily hours reduced from 20 hours to 12 in late 2021.

“The additional one hour has made a big difference,” Shinhan Investment Corp said, with daily average visitors estimated to have risen from between 2,000 and 3,000 last year to 4,000 this month.

“Daily average sales from mass visitors have shown month-on-month growth since January and exceeded KRW2.1 billion in March. The figure is far higher than average levels of KRW1.6 billion to KRW1.7 billion in 1H21 when the casino was open for 20 hours every day. Robust growth in demand amid limited supply has led to an increase in hourly sales.”

Despite the significant improvement, Kangwon Land still only has 129 of its 200 tables in operation with no side bets allowed.

“The 1,660 gaming seats are managed by dealers rotating on one or two shifts. As such, fewer operating hours have actually reduced capacity utilization,” said analyst Ji In-hae.

“Casino capacity is now at levels seen in 2016-2017 when the company’s earnings hit record highs. With strong demand already confirmed, the only hurdle remaining is the removal of restrictions on operating hours.”

Shinhan Investment Corp has maintained its “Buy” rating on Kangwon Land shares with a target price of KRW33,000. Shares were trading at KRW28,100 at Wednesday close.