South Korean casino operator Paradise Company Limited has released its financial results for the second quarter showing a 26% decrease year-on-year in overall sales to $122.91 million alongside an 85.3% fall in gross profit to $6.58 million.
The Seoul-listed firm opened its giant Paradise City integrated casino resort near Incheon in April and last month revealed that the $1.7 billion development had welcomed an average of 3,100 daily visitors over its first 100 days of operation. The foreigner-only venue, which was built in partnership with Japanese pachinko operator Sega Sammy Holdings Incorporated, sits on a 10.6-acre plot of land adjacent to Incheon International Airport and offers 350 slots as well as some 160 live gaming tables.
The largest casino operator in South Korea, Paradise Company Limited also runs gambling facilities in the cities of Busan, Seogwipo-Si, Incheon, Jeju and Seoul and posted a deficit for the three months to the end of June of $26.15 million thanks to negative earnings before interest, tax, depreciation and amortization of $10.23 million.
This represents the second consecutive quarter that Paradise Company Limited has revealed a drop in sales after the previous three-month figure fell by 9.3% year-on-year to $125.15 million and pushed its gross profit down by 44.7% to $15.81 million.
The operator blamed the most recent declines on a 43.7% decrease in casino sales due to “weak VIP luck” as well as plunging “Chinese VIPs as a result of [the] THAAD issue”.
Chinese gamblers represent an important source of revenues for South Korean casinos as they account for almost half of all takings. But, last year saw Beijing begin limiting the number of its nationals that are permitted to visit the peninsula due to Seoul’s July of 2016 decision to deploy the Terminal High Altitude Area Defense (THAAD) anti-missile system. This United States-supplied scheme was installed after North Korea, which is a neighbor and long-time ally of China, began making moves to further develop its own offensive missile capabilities.
However, Paradise Company Limited explained that the second quarter had seen the number of Japanese VIP players visiting its facilities grow by 26% year-on-year to account for 32% of its total drop. By contrast, Chinese high-stakes punters brought in 34% of its drop for the three-month period, which represented a decline of 16%, while the company moreover experienced a 17% swell in VIP customers from other nations along with a 26% rise from its mass-market offerings.