South Korean Casinos Are Forced to Close Again amidst the Third Wave of COVID-19

Article by : Helen Dec 15, 2020

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The third quarter of 2020 was a gulp of fresh air for struggling casinos in South Korea, but all good things quickly come to an end in the brave new coronavirus world. As the state is experiencing the biggest surge in daily new cases (580 confirmed COVID-19 infections on December 7) since the first wave in February and March, the state officials prefer to play it safe and curb the spread of the virus before it gets out of hand.

The South Korean government toughened up the restrictions and introduced the Level 1.5 measures of the coronavirus mitigation strategy throughout the whole country on December 1. They are expected to remain in place until December 14, but if the pandemic has taught us anything, there is no guarantee the restrictions will be eased down as planned. The Seoul metropole area, where approximately half of the state’s population resides, found itself under a full-on lockdown starting December 6 as the Level 2.5 (one step from the strictest ones, Level 3) restrictions came into effect. The affected area includes the capital itself, as well as Incheon and Gyeonggi Province. The decision is expected to be enforced at least for the next three weeks.

So, South Korean casinos have found themselves in a pickle once more as they have to fall in line with tougher restrictions.

Grand Korea Leisure, a state-run casino operator owning three Seven Luck venues throughout the country, was already previously forced to close its two Seoul establishments on November 24. Despite the hopes that the venues will reopen on December 8 as planned, their temporary closure was extended to last until December 29 in the light of Level 2.5 measures having been introduced in the capital area. And, to add insult to injury, the operator’s only Seven Luck venue that was still open – the one in Busan – also had to stop welcoming guests starting December 1. The property is expected to reopen on December 15; however, considering the government’s stance on curbing the spread of the virus, it seems to be unlikely to go as planned.

Kangwon Land, the casino located in a remote mountain area in the Gangwon Province, also announced it is temporarily closing its doors to guests starting December 8 until December 29. Needless to say, the COVID-19 pandemic hit the casino operators hard. Paradise Co Ltd, one of the largest casino operators in the country, reported a year-on-year drop in sales of 67% and operating losses of KRW31 billion (roughly $28.5 million in US dollars) in the third quarter of 2020.

In its initial temporary closure notice, Grand Korea Leisure projected their losses from closing the two casino venues to be at KRW5.1 billion (around $4.7 million in US dollars). Now that the company had to close their third property and extend the closure of the two Seoul ones, the losses will only continue piling up.

Even Kangwon Land, which has a unique advantage over its competitors – it is the only casino in South Korea that is allowed to welcome South Korean nationals as players; all the other casinos remain foreigner-only even amidst the pandemic – didn’t manage to turn a profit in 3Q2020. The casino’s operating losses amounted to almost KRW65 billion (roughly $59.8 million in US dollars). Still, it was better than the quarter before that – the company reported operating losses of KRW103.8 billion (roughly $95.5 million).

With harsher restrictions in place and forced temporary closures, there is hardly hope the last quarter of 2020 will help the casino operators compensate for their disastrous losses from the first half of 2020 and at least get a step closer to breaking even this year.

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