Casino Is BAck to Normalized

Casino Is Back to Normalized

The long-awaited reopening begins

Thanks to the increase in vaccination rates and the global transition to the COVID-19

pandemic, the benefits of easing social distancing regulations and lifting travel

restrictions are expected to be fully reflected in the profits of casino players. As casino

access is completely normalized, full-fledged earnings recovery should be confirmed.

Accordingly, we maintain a positive outlook for the sector.

The expected recovery of the casino industry is expected to take place in the order of 1)

easing social distancing regulations (business normalization) → 2) easing restrictions

on movement between countries (increasing demand for Gorollers) → 3) expanding

inbound traffic (increasing general VIP and mass visitors). The Japanese government is

expected to lift restrictions on cross-border movement around July, but for China,

normalization is expected to be relatively delayed due to the prolonged Chinese

government's zero-corona policy. As a result, it is expected that profits will recover in the

order of casinos that can accommodate both domestic and foreign visitors, integrated

resorts (IR) with non-foreign facilities, and casinos for foreigners. We present Kangwon

Land as the best choice in the sector to see the benefits of expanding operational

capacity (e.g., operating hours and the number of tables) with business normalization

from 2H22.

Casino for both Koreans and foreigners: Expect a steep recovery in profits

U.S. casinos, whose operations normalized last year, are announcing record quarterly

results that surpass the level before the pandemic, thanks to the release of pent-up

demand. Looking at Korean casinos that satisfy both domestic and foreign customers,

business hours increased as social distancing regulations were lifted in April. As side

betting will be available from mid-May, operating conditions are expected to be almost

normalized. As such, the possibility of releasing suppressed demand has laid the stage

for a rapid recovery of 2H22 profits at the pandemic level.

Casino exclusively for foreigners: to recover to half the pre-pandemic level

Prior to the COVID-19 crisis, the main customers of foreign-only casinos in Korea were

visitors to China and Japan (VIP drop amount: mid-30% for Chinese and early 40% for

Japanese). As visa-free travel for Japanese is expected to resume around July, the

pent-up demand for Japanese VIPs should be released from 2H22. However, as China

sticks to its zero-corona policy and regulations on junkets remain, it is difficult to expect

Chinese VIP demand to return to normal before the pandemic this year.

source:

SPORTSTOTOHOT.COM