Losses grow at South Korean casinos
Casino revenue losses are piling up thanks to shutdowns related to the COVID-19 pandemic.
Calvin Ayre reports that while some casino’s are starting to report gains, many are still in the red.
South Korean casino operates Paradise Co and Kangwon Land fall into the latter category.
Kangwon Land’s casino in South Korea is still feeling considerable pressure, reporting a loss of $38.4 million for the second quarter of the year.
This follows a loss of $131.68 million from the first quarter, completing wiping out its $42.97 million profit from the second quarter of 2019.
The Kangwon Land casino is the only property that has been approved for local gamblers and was forced to shut down from February 23 to May 8 because of COVID-19.
When it opened, the casino only welcomed back VIP gamblers at first.
Gross gaming revenue for the second quarter plummeted 91.4 per cent year-on-year and 85.9 per cent quarter-over-quarter.
The figure stood at $23.88 million, with total sales at the venue dropping 90.5 per cent to $29.22 million.
As a result of the continued weak performance, Kangwon Land saw a 63.5 per cent drop in sales across the entire first half of the year, reporting an aggregate loss of $170.1 million.
Paradise, which is behind four foreigner-only casinos in South Korea, was forced to report a net loss of $26.9 million in the second quarter, which was on top of the $2.46 million loss from the first quarter.
Overall sales for the company plummeted 68.1 per cent year-on-year and reached just $62.97 million, while casino sales lost 65.7 per cent to peak at $29.99 million.
The four casinos halted their operations as of March 24, with one, on Jeju Island, picking up where it left off on April 13.
The remaining three followed a week later, but the damage had already been done.
This led Paradise to scramble to cut costs, including offering paid and unpaid leave, voluntary retirement options and more.
Against the backdrop of a weak 2020, South Korea is about o get another casino operator in its landscape.
Mohegan Gaming and Entertainment wants to have a large integrated resort in the country by 2022, and isn’t deterred by the sudden economic downturn caused by COVID-19.
It continues to push forward and has brought in two new executives to help ensure everything goes smoothly.
David Martinelli is now MGE’s chief marketing officer and Judy Newman-Locke its VP of human resources management.
Martinelli has been with the company for the past 11 years and Newman-Locke is making her debut.
Mohegan pushes on with South Korea IR
US casino resort operator Mohegan Gaming and Entertainment is on track to complete a multi-billion dollar integrated resort project in Incheon, South Korea by early 2022, despite disruptions caused by the unprecedented health crisis that has gripped the world.
Casino News Daily reported in April that Mohegan Gaming chief executive Mario Kontomerkos said that “work continues and we are working toward our 2022 goal.”
Mohegan Gaming’s South Korea project, known as Inspire Entertainment Resort, involves the construction of a luxury integrated resort with a casino in Incheon, a city located near the capital Seoul that has long been an important transportation hub as it hosts the massive and ultramodern Incheon International Airport.
Mohegan Gaming’s property is set to be developed in several phases, the first of which is slated to be completed and unveiled by 2022.
Phase one of the mega-scheme will include 1,250 hotel rooms, a foreigner-only casino with 700 slot machines and 160 table games, a 15,000-seat entertainment venue, and 40 dining outlets, among other facilities.
According to a previous report by local news outlet Korea Times, the Inspire integrated resort is set to be developed in four phases, with the final one due to be completed by 2031.
The same report by Korea Times claimed that Mohegan Gaming has earmarked some $5 billion for the development of its integrated resort in South Korea over four phases.
It is believed that the company is planning to spend around $1.3 billion on phase one.
Construction on the second phase of the scheme is set to begin in 2021, according to Korea Times.
That phase, too, is set to cost more than $1 billion to the hotel and casino operator.
It will include the addition of a Paramount Pictures-branded indoor theme park that will be “unlike any other in Asia.”
Phase two of the Inspire project is slated to be completed by 2025.
