Japan VIPs' 'Chip' Overflowing

Foreign Casinos in Korea
High Possibility of 3Q Turnaround
Increase in Visa Visits by Japanese VIPs

[Asia Economy Reporter Junho Hwang] Japanese VIPs' chips are pouring into foreign casinos in South Korea. As the sky routes, which were blocked due to COVID-19, have opened up, they are spending money at Korean casinos. The securities industry has expressed expectations for stock price increases following visa-free entry.

According to Paradise on the 11th, the Japanese VIP drop amount in July reached 74.1 billion KRW, an explosive increase of 43,859% compared to the previous year. This is about 40% of the level compared to 2019, when there was no COVID-19 base effect. GKL's Japanese VIP drop amount also recorded 28.4 billion KRW, a 14,560% increase compared to the previous year. Compared to 2019, it has recovered about 31%. The drop amount refers to the amount spent to purchase chips to enjoy the casino.

They went to Korea even obtaining visas just to enjoy the casino. Ji Inhae, a researcher at Shinhan Financial Investment, analyzed, "The casino industry is not sensitive to exchange rates or the economy, and if the business environment and marketing are properly aligned, it is a case that once again proves the characteristic of immediate recovery without lead time." South Korea and Japan had suspended mutual visa-free entry due to COVID-19. As concerns about the spread of COVID-19 decreased, expectations grew last month that a mutual visa-free agreement could be reached, but discussions have been postponed due to the assassination of former Prime Minister Shinzo Abe and the increase in COVID-19 cases in Japan.

The outlook is more positive going forward. South Korea will temporarily allow visa-free entry for Japan, Taiwan, and Macau throughout this month. This is a measure for the Seoul Festa Tourism Festival. Unless major problems occur through this measure, discussions on implementing visa-free entry are likely to continue. In line with this, the airline industry is increasing the Gimpo-Haneda route by four times compared to before this month. From next month, routes such as Gimhae-Narita are also expected to be expanded.

Lee Kihoon, a researcher at Hana Securities, said, "Japan is celebrating the Obon holiday this month," and predicted, "If the recovery speed is faster than expected and there is no hold rate variable, it is certain that leading casino companies will achieve profitability in the third quarter." The hold rate refers to the percentage of the drop amount that the casino actually takes.

This content was produced with the assistance of AI translation services.