Hana Securities Estimates 9 Percent Operating Profit Decline for Paradise Co on Tourism Fund Changes
TL;DR — Hana Securities projects a 9% operating profit drop for Paradise Co under new tourism fund bands, versus 22% in a worst-case view. The 15% levy applies only above KRW300 billion revenue. Peer operators like Lotte Tour and Inspire show mixed financial positions relative to the threshold.
SCCG Take — The marginal rate structure contains the profit impact for high-revenue properties. Operators must monitor final Ministry confirmation on banding application.
Hana Securities Co Ltd assesses that Paradise Co Ltd faces a 9 percent operating profit decline under proposed changes to South Korea’s Tourism Promotion and Development Fund rules. This contrasts with a worst-case scenario of a 22 percent reduction. The brokerage analysis centers on a new revenue banding system detailed in the proposals.
Tiered Contribution Mechanics for Paradise Co Properties
The existing structure requires casino venues to contribute 1 percent of annual GGR up to KRW1 billion, 5 percent on GGR between KRW1 billion and KRW10 billion, and 10 percent on GGR of KRW10 billion or more. Proposed changes would maintain the 10 percent ceiling but apply a 15 percent levy solely to revenue above KRW300 billion (US$212.0 million).
Analyst Lee Ki-hoon calculated the impact on Paradise Co properties. Paradise City in Incheon, projected to generate KRW700 billion in 2028 revenue, would incur an extra KRW20 billion contribution on the KRW400 billion above the threshold. Paradise Walkerhill in Seoul, projected at KRW350 billion revenue, would face an additional KRW2.5 billion payment. The combined increase totals KRW22.5 billion, not KRW60 billion.
Lee stated that assuming a new bracket at KRW300 billion, 2028 operating profit would decline by approximately 9 percent rather than 22 percent. Clarification from the Ministry of Culture, Sports, and Tourism confirmed the 15 percent levy applies exclusively above that threshold, as reported by GGRAsia.
Position of Peer Operators Under the Proposals
Lee referenced Lotte Tour Development Co Ltd, operator of Jeju Dream Tower Casino, which recorded KRW470 billion in casino revenue last year but broke even at the pre-tax level. Inspire Entertainment Resort in Incheon generated KRW270 billion in GGR last year, below the KRW300 billion threshold, yet posted a KRW46 billion operating loss with KRW116 billion in financial costs.
A recent note from SK Securities saw limited impact on Lotte Tour from proposed casino regulatory reforms in South Korea. The Hana Securities analysis underscores varying exposure across operators based on current revenue and profitability profiles.
Reporting: GGRAsia
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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