South Korea Casino Sector Eyes Tourism Gains as VIP Demand Remains Uncertain

South Korea’s casino sector is expected to benefit from record inbound tourism, although the impact is likely to be stronger for mass-market gaming than for VIP play, according to NH Investment & Securities.

Read more Macau Gaming Tax Revenue Reaches $969M in August

Analyst Lee Hwa-jeong said South Korea received 12.8 million inbound visitors during the first 7 months of 2026, marking an all-time high for the period. The brokerage expects the country’s full-year inbound visitor tally to reach 23 million.

Growth has been driven mainly by an increase in Chinese tourists. Arrivals from Japan and Western markets have also expanded, according to the institution.

NH Investment said the increase in inbound visitors should support South Korea’s foreigner-only casinos, particularly their mass-market segments. However, the brokerage noted that stronger tourism numbers may not lead to the same level of improvement in VIP gaming business.

The casino sector is also entering a period of higher year-on-year comparison bases. For this reason, the brokerage recommended monitoring September and October data to determine the strength of mass-market demand and any recovery in VIP sentiment.

VIP Outlook Remains Cautious

The brokerage was cautious about Chinese VIP demand ahead of China’s National Day holiday period in October.

NH Investment cited signs of weaker sentiment among Chinese VIP players in Macau. It said this could limit expectations that the holiday period will provide a major boost to South Korean casino earnings.

The report also referred to an intervention by the Chinese embassy in Seoul in early August. The embassy reportedly raised concerns over references in some South Korean media reports to Chinese nationals as a growth driver for the casino industry.

It also called for restraint in casino marketing aimed at Chinese citizens. NH Investment said the embassy’s comments had not resulted in direct regulatory or operating restrictions, but they could temporarily weaken gaming sentiment.

The brokerage stated that operators should not expect a significant uplift from the National Day holiday period alone. The September and October figures will be important in showing whether higher visitor arrivals can translate into stronger mass-market gaming demand.

Read more AFL

Casino Levy Changes Under Review

NH Investment also discussed proposed regulatory changes for South Korea’s casino sector. The nation’s Ministry of Culture, Sports and Tourism is trying to revise the Tourism Promotion Act.

The amendment aims to increase the highest Tourism Promotion and Development Fund contribution rate of casino businesses from 10% to 15% per year of their gross gaming revenue, or GGR. It would also introduce a 5-year license-renewal system.

The brokerage said concerns over these planned changes had already been largely reflected in the share price of Paradise Co Ltd. It was estimated that a higher tourism-promotion levy would represent only about 7.7% of Paradise Co’s forecast operating profit for 2027.

Grand Korea Leisure Co Ltd is expected to face no material impact from the proposed higher levy. NH Investment said each of its casinos was forecast to generate annual revenue below the threshold at which the increased rate would apply.

Kangwon Land Expansion Plans

NH Investment separately said Kangwon Land Inc should record meaningful earnings growth from 2028.

Kangwon Land is the sole corporation authorized to establish an entertainment casino complex for the people of South Korea. The projected income growth is dependent upon the establishment of the new casino sector and the installation of 50 additional tables and 250 slot machines.

Construction work for the new gaming area is scheduled to be completed by the end of 2027. Renovation work involving 477 hotel rooms and 280 condominium units is also set for completion by the same period.

The analyst said disruption from the renovation programme had been more limited than expected. This was supported by a casino hold rate above 30%, along with higher hotel occupancy and average daily room rates.

Read more Elvis Presley: Burning Jackpots Slot Review

Source: GGR Asia