South Korea casino resort Kangwon Land hopes to benefit from the Winter Olympics being held in nearby PyeongChang later this month.
The international sporting spectacle officially begins next Friday, February 9, with the opening ceremonies. Following the conclusion of the Winter Games more than two weeks later on February 25, Kangwon Land will prepare for a reduction in its operating hours.
Some 30 miles south of Olympic Stadium in a remote area of Jeongseon County, Kangwon Land is the only South Korea casino permitted to allow entry to residents. But in an effort to curb a growing prevalence among citizens gambling, the federal government has ordered the casino to take steps to reduce play.
At the direction of the Ministry of Culture, Sports and Tourism (MCST), Kangwon Land is cutting its casino operations from 20 hours per day to 18. The gaming floor is presently open daily from 8 am to 4 am, but come April 1, that will be reduced to 10 am to 4 am.
Little Financial Impact
Kangwon Land is a recommended accommodation hotel for spectators traveling to the 2018 Winter Olympics. It’s especially ideal for those planning to spend a considerable amount of time at the nearby Jeongseon Alpine Center.
While state officials have no qualms with taking gambling money from foreigners in town for the Olympics, they want to tighten play on their own citizens. A casino entry fee has been implemented on South Koreans, and locals cannot gamble after consuming alcohol.
South Koreans are responsible for nearly 99 percent of Kangwon Land gaming revenue. But they will soon have 120 fewer minutes to spin one of the 1,360 slot machines or place a bet at one of 130 table games.
In an advisory issued last month, JPMorgan Securities said the two-hour reduction could cut revenue by up to 10 percent “if we simply assume Kangwon Land’s revenue is evenly split during operating hours.”
But now with the two hours in question known to be 8 am to 10 am, the financial impact will presumably be far less than 10 percent, as the morning hours are typically a slow period for a casino.
Scandal Response, Casino Expansion
It came to light last fall that former Kangwon Land CEO Choi Heung-jip hired 95 percent of the resort’s 493-person staff based on requests of politicians and other well-connected persons. That led to dozens of less-qualified workers being handed jobs over more experienced individuals.
The scandal attracted national media attention, as Kangwon Land is a taxpayer-funded and owned facility. While the government-owned casino has generated controversy, South Korea remains committed to expanding its foreigner-only integrated casino resort market.
Last April, Incheon Airport’s $1.12 billion Paradise City was the first commercial property to open. However, an ongoing Chinese travel ban in response to North and South Korea’s escalating political tensions has led to disappointing first-year gaming revenues.
The political standoff has seemingly eased, at least for the month ahead, as North Korea has agreed to participate in the Winter Olympics at the request of South Korean President Moon Jae-in.