Gambling operator Grand Korea Leisure Co. announced earlier today that it had decided against applying for a casino license to operate an integrated resort on the Yeongjong Island. The South Korean state-run company cited the Mainland China anti-corruption campaign as one of the main reasons for its decision.
Chinese President Xi Jinping’s anti-graft campaign has resulted in Chinese high rollers withdrawing from Macau and other popular Asian-Pacific gambling destinations. Well-to-do Chinese are among the most highly favored casino customers due to their long-standing reputation of big spenders.
And it seems that their withdrawal from the Asian gambling scene led to Grand Korea Leisure revealing that it had nixed the project for the construction and operation of an integrated on the Western gateway island.
Following the announcement that the South Korean government would grant two more casino licenses by the end of the year, the state-run gambling operator started looking for a partner for its casino complex project a few months ago.
An official for the company told local media that they have based their decision to abandon the plan on the “shrunken demand” from Mainland China customers. In addition, he noted that Grand Korea Leisure’s attempts to form a partnership for the operation of the potential casino complex have fallen through. However, the gambling operator is still ready for “another try”, provided that there are opportunities for a large-scale project.
Currently, there are 17 licensed casinos within South Korea’s borders. Residents of the country are allowed to gamble only at one of those. The rest of the venues are highly dependent on income from Asia-Pacific high rollers, particularly ones from Mainland China.
Grand Korea Leisure currently manages three foreigner-only gaming facilities, all under the Seven Luck brand. The gambling company reported net income of KRW22.6 billion for the third quarter of the year, up 21.8% quarter-on-quarter and down 41.5% year-on-year.
Sales dropped 9.1% from the previous quarter and 18% from the same three-month period a year ago. The company reported total group sales of KRW111.3 billion.
Grand Korea Leisure’s operating income for the third quarter of 2015 amounted to KRW26.5 billion, up 22.1% quarter-on-quarter and down 32.5% year-on-year. Income before tax totaled KRW29.7 billion, up 21.9% from the second quarter of the year and down 39.4% year-on-year.
The casino operator noted that the sequential improvement in operating income was mainly due to the fact that the company had quite a challenging second quarter. The number of foreign visitors coming to South Korea dropped 41% year-on-year in June due to reports for a possible Middle East Respiratory Syndrome outbreak.
Grand Korea Leisure, subsidiary of the country’s Korea Tourism Organization, was formed in 2005. Two of the company’s casinos are based in the capital Seoul and one is located in Busan.
