Kangwon Land to Face Constrained Annual Growth in Revenue

Kangwon Land CasinoRecently, JP Morgan Chase & Co, the international brokerage company, has released a report where it has stated that Kangwon Land will have to face constrained annual growth in the revenue generated from casino gaming. Kangwon Land Casino is the only legal casino operating in South Korea that permits local people to gamble over there.

The brokerage firm in its report published in August 2017 said that South Korea government is putting a lot of pressure on the Kangwon Land to make the revenue growth moderate. Now the government is going to be stricter and will place stringent rules which are otherwise known as “Gambling Industry Reform Plan“.

According to the analysts Sean Zhuang and DS Kim, the government has laid out four critical objectives. These objectives are going to target the casino land by imposing higher penalty amount and making changes in the revenue cap policy. The rules are going to be stringent than before.

South Korea’s revenue cap has been implemented in the past, and the plan came into force by National Gambling Control Commission for the sole purpose of regulating the local gambling industries like horseracing, lotteries and Kangwon Land. For the past four years, the revenue cap has been calculated as a component of GDP which is approximately 0.54 percent of the gross domestic product.

Till date, Kangwon Land was able to exclude itself from the revenue cap imposed by the government. According to the reports of JP Morgan, the revenue generated for Kangwon Land for the year 2016 was $1.5 billion and was able to exceed the cap set by the Korean government at $1.3 billion. The report further states that this casino operator has been vehemently violating the revenue cap set by the government in recent years. The story also mentioned that government is looking forward to tightening the screws around Kangwon Land to closely monitor its revenue policy.

The analysts at JP Morgan issued the following statement:

The government’s Gambling Industry Reform Plan clearly points to further regulatory tightening and increasing oversight on local gambling, and we believe Kangwon Land has no choice but to keep curbing its revenues to avoid further scrutiny.

Earlier, Kangwon Land was embroiled in a corruption scandal where it was said that more than 95% staff members were recruited due to their connection to government politics. Last month, Choi Heung-Jip, the CEO of Kangwon Land was imprisoned due to pending charges. He was also blamed for hiring people especially at the advice of some politicians and other influential people in the country.

Jay Stevens

Jay Stevens

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