TLDR
- KB Securities expects the decline in chip purchases at South Korea’s foreigner-only casinos to ease after China’s October 22 offshore trust tax deadline.
- Lotte Tour Development’s third-quarter casino visits are estimated to rise nearly 9%, but drop per visitor and revenue are expected to fall 5%.
- Paradise Co., Lotte Tour Development, and Grand Korea Leisure all posted lower casino drop in September than in August.
- Macau’s September gross gaming revenue fell 1.2% year-on-year, which one analyst linked to Chinese capital controls.
- South Korea is weighing a plan to raise casino contributions to a tourism fund from 10% to 15% of revenue.
South Korea’s foreigner-only casinos could see the decline in customer chip purchases ease after China’s offshore trust tax deadline on October 22, according to KB Securities.
The outlook comes as operators deal with weaker spending per visitor, tighter Chinese capital controls, and a proposed rise in contributions to a government tourism fund.
KB analyst Choi Yong-hyun said China’s closer scrutiny of wealthy individuals is not a temporary factor. Still, he expects the decline in casino drop to end once the deadline passes, South Korean newspaper Maeil Shinmun reported on Tuesday.
The drop measures how much money customers exchange for gaming chips. It differs from visitor numbers, which can rise even when each customer spends less.
More Visitors, Less Spending Per Guest
KB Securities estimated that Lotte Tour Development’s third-quarter casino visits would rise nearly 9% from a year earlier. However, it expects drop per visitor to fall 5%, with revenue also down 5%.
The forecast shows a gap between attendance and spending. More customers were expected to visit, but each one exchanged less money for chips.
The pressure is not limited to one company. Daol Investment & Securities said Paradise Co., Lotte Tour Development, and Grand Korea Leisure all posted lower drops in September than during August’s peak season.
KB’s outlook points to an easing of that decline after the deadline. It is not an announced recovery in actual operator results.
Yuanta Securities analyst Lee Hwan-wook said Chinese capital controls, including the offshore trust tax, have weakened betting sentiment among VIP customers.
He linked those pressures to Macau’s September gross gaming revenue. It fell 1.2% year-on-year to MOP18.1 billion, or about $2.24 billion.
South Korea is also weighing a plan to raise the cap on contributions foreigner-only casinos make to the Tourism Promotion and Development Fund. The ceiling would increase from 10% to 15% of casino revenue.
KB estimated the change would add more than KRW150 billion, or $113 million, to annual industry costs. A softer version of the plan has also been considered.
The brokerage pointed to a proposed increase in departure charges as one reason it expects a less severe contribution plan. It also cited future competition from Osaka’s integrated resort, scheduled to open in 2030.
China’s Offshore Trust Tax Deadline Arrives
According to China’s State Taxation Administration, taxpayers must declare and pay personal income tax linked to trusts outside China by October 22. The date marks the end of a 90-day transition period, after which late payment surcharges apply.
The transition follows rules issued on July 24. They cover unpaid tax on assets placed into trusts from 2023 to 2025, as well as trust income earned before 2026.
Income from trusts funded by Chinese tax residents remains taxable every year, whether or not it is paid out. The October deadline ends the transition period but does not remove that ongoing annual tax obligation.
