Grand Korea Leisure reports surge in February sales

In February, Grand Korea Leisure Co Ltd (GKL), a prominent operator of foreigner-only casinos in South Korea, reported a significant month-on-month increase in casino sales. The sales rose by a staggering 71.9 percent to KRW33.68 billion (US$25.3 million), as per the company’s filing to the Korea Exchange. However, this figure marked an 8.4 percent decrease from the same period in the previous year.

The sales from table games, a major contributor to the casino’s revenue, were nearly KRW31.19 billion. This represented an 88.9 percent sequential increase, but interestingly, it was a 9.1 percent decline from the previous year. On the other hand, machine-game sales, which were nearly KRW2.5 billion, saw a 19.2 percent sequential decrease but a slight 1.6 percent year-on-year increase.

The February sales brought GKL’s total casino sales for the first two months of the year to nearly KRW53.28 billion. This figure, however, indicated a 22.6 percent year-on-year decline.

GKL operates three foreigner-only casinos under the Seven Luck brand. Two of these are located in the capital city of Seoul, including one in the upscale Gangnam district, and the third one is in the southeastern port city of Busan. The company is a subsidiary of the Korea Tourism Organization, which is affiliated with the country’s Ministry of Culture, Sports, and Tourism.

Understanding key metrics in Korea’s casino industry

An interesting metric in the casino industry is the “drop” – the money paid by customers to purchase gaming chips. In February, the drop amount for GKL was nearly KRW291.61 billion. This was a 3.9 percent sequential decrease but a notable 39.1 percent increase from February 2023. The combined drop amount for January and February reached KRW594.94 billion, marking a 23.4 percent year-on-year increase.

In the context of casinos, the term “drop” refers to the money or credit that is exchanged for chips. This is the initial amount of money that players bring to the table to start playing. For instance, in a game like blackjack, the total drop is what is found in the metal drop box attached to the table where all bills and markers (credit slips) are dropped into. The corresponding casino win is the amount left over when chips are cashed. This is expressed as a percentage of the drop, which also corresponds to revenue.

“Drop” can sometimes be used interchangeably with the term “handle”. However, the “drop” can also refer to the money lost by either a player or the casino.

Despite these significant changes in sales and drop amounts, the company did not provide any commentary on the reasons behind these fluctuations. This leaves room for speculation and further analysis to understand the dynamics of the casino industry in South Korea and the factors influencing GKL’s performance.

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