GKL Third Quarter Net Profit Falls 52.6% as Costs Outrun Flat Casino Sales

Grand Korea Leisure took almost exactly what it took a year earlier at its three Seven Luck casinos, at much the same hold. The profit went on costs, and the Chinese visitor boom that is lifting Paradise is not reaching GKL's tables.

• Grand Korea Leisure (GKL) reported provisional third quarter net profit of ₩6.95 billion, approximately $5.2 million, down 52.6% year on year and 61.4% on the second quarter, in a filing on 10 November
• Revenue rose 0.3% to ₩109.7 billion, but operating profit fell 44.4% to ₩9.6 billion as cost of sales rose 8.0% and selling and administrative costs 16.1%, on the company's results presentation
• GKL's monthly filings show third quarter casino revenue up about 1.1% on drop up 1.7%, with table hold about 10% in both years, after a weak August and a September rebound
• Chinese visits to GKL's casinos fell 8.7% over nine months while Chinese arrivals in Korea rose 29.0% to August, and Paradise Co lifted third quarter operating profit 62.3% on 10 November
• October casino revenue was ₩29.3 billion, up 2.5% year on year but down 21.5% on September, as GKL faces the Osaka resort due around 2030

Flat Revenue, Higher Costs and a Halved Profit

Grand Korea Leisure (GKL), whose majority shareholder is the Korea Tourism Organization with 51%, runs three foreigner-only Seven Luck casinos: Gangnam COEX and Seoul Dragon City in Seoul, and Busan Lotte. It filed provisional consolidated results for the three months to 30 September on DART on Tuesday, 10 November. The figures have not been reviewed by the auditor and may change, the filing says.

Revenue was ₩109.7 billion, approximately $81.9 million, against ₩109.4 billion a year earlier and ₩120.5 billion in the second quarter. Operating profit fell 44.4% to ₩9.6 billion, approximately $7.2 million, from ₩17.3 billion, and was 53.8% below the second quarter. Pre-tax profit fell 53.6% to ₩8.7 billion and net profit 52.6% to ₩6.95 billion, from ₩14.7 billion.

GKL's results presentation puts third quarter cost of sales at ₩90.0 billion, up 8.0%, and selling and administrative costs at ₩10.1 billion, up 16.1%. The operating margin narrowed to 8.8% from 15.8%. Over nine months, revenue rose 6.4% to ₩340.8 billion, approximately $254.5 million, while operating profit fell 9.1% to ₩48.6 billion and net profit 16.1% to ₩40.1 billion.

GKL gives no reason for the third quarter fall itself. Its Korean-language results statement, in our translation, says nine-month marketing spending rose 9% to ₩54.1 billion and casino charges, mainly the tourism fund levy, 7% to ₩41.8 billion. It says staff are sent to Japan, Taiwan, Mongolia and Thailand to meet VIP customers, while Greater China customers are handled through "non-face-to-face" marketing.

The Monthly Filings Show Volume, Not Hold, Stalled

Adding GKL's monthly disclosures, casino revenue was ₩41.7 billion in July, ₩31.1 billion in August and ₩37.3 billion in September, about ₩110.1 billion for the quarter. That is 1.1% above a year earlier and 8.7% below the second quarter. Drop, the amount customers paid for chips, rose 1.7% year on year to about ₩990 billion but fell 6.0% on the second quarter. On our arithmetic, table hold was about 10% in both third quarters.

Nine-month visits fell 1.85% to 771,576. Japanese visits rose 4.2% to 289,400 and Chinese visits fell 8.7% to 307,539. Gangnam COEX lifted nine-month drop 17.7%, but its hold fell to 9.4% from 10.6%. On 3 November GKL reported October casino revenue of ₩29.3 billion, approximately $21.9 million, on drop up 1.8%.

Paradise Co reported on 10 November that its third quarter revenue rose 22.0% to ₩351.7 billion and operating profit 62.3% to ₩64.1 billion. Kangwon Land reported a 17.9% fall in operating profit on 6 November.

The Profit Fall Is a Cost Story, Not a Luck Story

GKL's costs rose about ₩8.0 billion year on year, on our arithmetic, almost exactly the ₩7.7 billion fall in operating profit. Revenue and hold barely moved, so this was not a bad run at the tables. The company presents the spending as the price of attracting and keeping VIP customers, but the third quarter shows little return on it.

GKL Is Missing the Chinese Boom Paradise Is Catching

Chinese arrivals in Korea rose 29.0% to 4.82 million in the eight months to August, the Ministry of Culture, Sports and Tourism said on 28 September. Over nine months GKL drew 8.7% fewer Chinese visitors, while Paradise, which also runs foreigner-only casinos, grew quarterly revenue 22%. GKL says it reaches Greater China customers remotely, and its staff trips to Hong Kong and Macau drew scrutiny in October. That caution may be defensible, but it appears to be costing GKL share.

October Offers No Clear Turn Yet

October revenue was lower than any month from March to September, on table hold of about 7.8%. That was similar to October 2025, so the fourth quarter may yet recover. GKL's dependence on Japan, its fastest-growing source of visitors, is the exposure Osaka threatens.

GKL's revenue has held up, but its cost base has not. Until it wins back Chinese players, it is spending more to stand still.