South Korea Casinos to Benefit from Record Inbound Tourism Surge but VIP Recovery Remains Uncertain

South Korea’s casino sector should continue to benefit from record inbound tourism, although gains are likely to favor mass-market gaming over VIP play. Analyst Lee Hwa-jeong at NH Investment & Securities highlighted that the country received 12.8 million inbound visitors in the first seven months of 2026, an all-time high for the period. The brokerage expects the full-year inbound visitor tally to reach 23 million, driven primarily by an increase in Chinese tourists along with arrivals from Japan and Western markets.

NH Investment said the rising number of inbound visitors “should benefit” South Korea’s foreigner-only casinos, particularly their mass-market segments. The improvement in earnings could be limited, as inbound growth was less likely to translate into a comparable increase in VIP business. The brokerage was cautious about the outlook for Chinese VIP demand ahead of China’s National Day holiday period in October, citing signs of weaker sentiment among Chinese VIP players in Macau.

The report also referred to an intervention in early August by the Chinese embassy in Seoul. The embassy expressed concern over references in some South Korean media reports to Chinese nationals as a growth driver for the casino industry, and called for restraint in marketing casinos to Chinese citizens. NH Investment said the embassy’s comments had not resulted in direct regulatory or operating restrictions but could temporarily dampen gaming sentiment.

Mass-Market Focus Amid Higher Comparison Bases

South Korea’s casino operators are entering a period of higher year-on-year comparison bases. Lee recommended monitoring September and October data to assess the strength of mass-market demand and any recovery in VIP sentiment, rather than anticipating a significant boost from the upcoming holiday period. Concerns regarding proposed regulatory changes for the country’s casino sector had already been largely reflected in the share price of Paradise Co Ltd. The brokerage estimated that a proposed higher tourism-promotion levy would represent only about 7.7 percent of Paradise Co’s forecast operating profit for 2027. Grand Korea Leisure Co Ltd would face no material impact from the proposed higher levy, as each of its casinos was expected to generate annual revenue below the threshold at which the increased rate would apply.

Kangwon Land Expansion Timetable and Q3 Projections

Kangwon Land Inc, the only business in South Korea permitted to run a resort with a casino open to locals, should record “meaningful” earnings growth from 2028. This is supported by the planned opening of a second casino area and the addition of 50 gaming tables and 250 slot machines. Construction of the new gaming area, as well as renovation work covering 477 hotel rooms and 280 condominium units, is scheduled to be completed by the end of 2027. The NH Investment analyst said disruption from the renovation programme had been “more limited than expected,” supported by a casino hold rate of more than 30 percent, as well as increases in hotel occupancy and average daily room rates. The brokerage forecast Kangwon Land Inc’s third-quarter revenue at KRW372.7 billion (US$277.8 million), down 3 percent year-on-year. Operating profit was estimated at KRW69.4 billion, a decline of 5 percent. As reported by GGRAsia, these mixed signals require operators to track near-term data before committing to expanded VIP capacity.

Monitoring the Critical Months Ahead

The coming quarter’s results will clarify whether mass-market momentum can offset softer VIP indicators and any residual effects from embassy messaging. Operators and investors should calibrate expectations around the specific revenue thresholds in the pending levy amendments rather than broad sector assumptions.

Reporting: GGRAsia

Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.