South Korean gaming market experiences growth fueled by a surge of Chinese tourists
South Korea's casino industry is experiencing a significant revival, with major companies reporting increased revenue. This growth is attributed to a combination of factors, including market trends, regional gaming growth, and economic conditions, although the specific impact of Chinese tourist inflow is not extensively detailed.
The South Korean gambling market is on an upward trajectory, with total revenue projected to reach $10 billion by 2025. This growth is driven by the increased interest in both land-based and online gambling formats. The Asia-Pacific region, including South Korea, is witnessing a surge in gaming and iGaming markets, fuelled by factors such as high smartphone penetration, fast internet, and a mobile-first gaming culture.
Historically, Chinese tourists have been a significant source of revenue for casinos in regions like Macau and parts of Southeast Asia. While specific data on their impact on South Korea's casino industry is not provided, it is reasonable to infer that an increase in Chinese tourists could contribute positively to the industry's growth, potentially due to increased gambling revenue and broader economic stimulus from tourism.
The South Korean casinos are legally closed to local residents and cater only to foreigners. Given the restrictions on Chinese citizens participating in gambling abroad, the majority of foreign tourists visiting South Korea are Chinese citizens, making them the main customer base for South Korea's casinos. Strategic visa initiatives and the revival of Chinese tourist interest are playing a pivotal role in the growth of South Korea's gaming industry.
The restoration of air traffic is a significant factor in the increase of tourist flows from China. The gambling industry in South Korea, particularly casinos, previously experienced significant losses. However, the rapid recovery, particularly in the casino sector, is evident, with shares of Paradise Co. and Grand Korea Leisure, the largest operators, soaring in anticipation of further tourist influx and profit recovery.
In December last year, President Yoon Suk-yeol imposed a six-hour state of emergency, causing panic among investors and tourists, leading to a sudden drop in tourist numbers. However, nearly a third (28 percent) of these tourists were Chinese citizens. As of last May, more than 7.1 million foreign tourists visited South Korea, the highest number since the start of the COVID-19 pandemic.
Improved bilateral relations between Seoul and Beijing are playing a role in the growth of the gambling industry in South Korea. Additionally, the industry benefits from South Korea's less regulated and more diverse gaming entertainment formats compared to other regions. The increased activity of travel agencies is also contributing to the growth of the gambling industry in South Korea.
As a new growth phase dawns for South Korea's gaming industry, the future looks promising for casino operators. The industry is expected to continue its upward trend, driven by the increasing tourist flows from China, geographical proximity, and well-developed infrastructure that make trips to South Korean casinos highly desirable.
What could be the lifestyle changes for South Korean casinos as a result of increased travel from China?The surge in Chinese tourists may lead to a shift in South Korea's casino lifestyle, potentially offering a more diverse clientele and the possibility of increased gaming revenue.
