Image by Ciaran O'Brien

Seoul Casinos Are Ordered to Be Closed Amidst a Surge in COVID-19 Daily New Cases

Article by : Helen Dec 10, 2020

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South Korea is going through a rough patch in terms of containing the coronavirus epidemic. It has reported more than 300 daily new infection cases almost every day since mid-November – the worst South Korea has seen since March.

The surge (and the possibility of dealing with the third coronavirus wave looming over South Korea) has prompted the state officials to order the implementation of Level 2 of COVID-19 mitigation response in the Seoul metropolitan area. The new measures came into effect in Seoul, Incheon, and Gyeonggi, among others. The restrictions are expected to last two weeks since their introduction unless the coronavirus spread figures remain dire.

This means that all the nightlife and other high-risk venues – including casinos – have to undergo closures once again.

Grand Korea Leisure has already announced that closing the doors of its two Seven Luck casinos will cost the business around 5.1 billion Korean won (which amounts to roughly US$4.5 million in financial losses), based on average daily net sales from July to September 2020. They are supposed to stay closed until December 8 unless the state officials will be forced to prolong the Level 2 restrictions. Paradise Co Ltd has also closed its two venues in the affected area – one in Seoul and another one in Incheon. The casino operator has recently reported operating losses of almost 31.1 billion Korean won (roughly 28 million in US dollars) in the third quarter of 2020. The year-on-year drop in sales is also harsh – it amounted to 67% in 3Q20.

The main reason for the staggering financial losses is cited to be the restrictions imposed on international travel, as the casino operator relies heavily on foreign tourists as potential customers. The Honam region (Gwangju, Jeonbuk, and Jeonnam) was also ordered to go under the Level 1.5 coronavirus-related restrictions. In these areas, casinos are still allowed to operate but at limited capacity – the occupancy rates should be kept under 20% of the casinos’ regular occupancy. Other measures regarding face masks, maintaining the physical distance, and frequent cleaning and disinfecting remain in place as well.

Level 1.5 restrictions have also impacted one of the biggest casinos in South Korea, Kangwon Land – the only non-foreign-only casino in the whole country. These measures are necessary to ensure the local hospitals don’t get overwhelmed with a wave of coronavirus-positive patients (as it was and is the case in the US and many other countries). However, there’s no denying they are one more blow to the already suffering South Korean casino industry. South Korea’s casino operators rely heavily on foreign tourists to gamble, as the country’s citizens are generally not allowed to enter casinos. The halt of international travel was a tremendous blow to all casinos, even Kangwon Land. It is the only casino in the whole country allowed to welcome South Koreans as players, located in a remote mountain area in the Gangwon Province.

Despite being allowed to serve locals, Kangwon Land reported a net income loss of 40.9 billion Korean won (roughly 36.9 million in US dollars) in the third quarter of 2020. Besides the drop in the number of guests, such financial losses are also caused by the longest forced closure among all other casinos in the country – and the occupancy limit of 1,500 guests per day.