Korean & Japanese Operators Losing Chinese Revenue
Korean and Japanese casino companies have faced significant business difficulties throughout 2022 due to their reliance on Chinese customers. This reliance has become problematic due to China’s hard stance against cross-border gambling and restrictions on citizens leaving the country due to the COVID-19 pandemic. In addition to the Chinese government’s crackdown on cross-border gambling, the gambling industry globally has also faced difficulties due to the COVID-19 pandemic. The pandemic has resulted in a significant reduction in travel and tourism, with many countries imposing travel restrictions and quarantine measures. This has had a particularly negative impact on casino companies, as they rely heavily on international visitors.
Japan continues to work on its plan to deliver integrated casino & hotel resorts across the country – these new venues will offer gambling products only available to foreign guests, Chinese customers are a source of revenue the business model will heavily depend on for feasibility. ©cegoh/Pixabay
One of the main difficulties faced by gambling enterprises that operate within the orbit of China’s economy is the Chinese government’s crackdown on cross-border gambling. In recent years, the Chinese government has taken a number of measures to curb the outflow of money from the country through gambling. This has included the establishment of strict controls on the use of Chinese UnionPay cards at casinos abroad, as well as increased scrutiny of individuals who make large withdrawals or transfers of funds abroad.
The impact of these measures has been particularly pronounced for the affected casino companies, which have traditionally relied heavily on Chinese customers. Many of these customers have been deterred from visiting casinos due to the increased difficulty of obtaining and using UnionPay cards, as well as the increased risk of being detected and punished by the Chinese government.
For operators seeking to market their services in China, the reduction in travel and tourism has been exacerbated by the restrictions on Chinese citizens leaving the country. China is a major source of tourists for both Korea and Japan – especially with its foreign-only integrated resorts. The restrictions on Chinese travel have had a significant impact on the casino industry in both countries.
China’s Domestic Policies Wreaking Havoc in Asian Gambling Industry
Overall, the business difficulties faced by Korean and Japanese casino companies due to China’s hard stance against cross-border gambling and restrictions on citizens leaving the country have been significant. These companies have had to adapt to a changing landscape, and many have struggled to maintain profitability in the face of these challenges. It remains to be seen how the situation will evolve in the future, but it is clear that to survive these services will need to be innovative and adaptable in order to succeed in this increasingly challenging environment.
One of the ways that well-capitalized gambling operators have attempted to mitigate the impact of these difficulties is by diversifying their customer base and focusing on attracting visitors from other countries. In some cases, this has included the development of new marketing strategies and the expansion of existing partnerships with travel companies and other industry partners.
Another strategy that has been employed by some casino companies is the expansion of online and digital offerings. With the pandemic and travel restrictions leading to a reduction in in-person gambling, many companies have turned to online platforms as a way to continue to engage with customers and generate revenue. This has included the development of online casino games, as well as the expansion of existing sports betting and other digital offerings. Despite these efforts, however, it remains challenging to fully compensate for the loss of Chinese customers. These customers have traditionally been a major source of revenue for the industry, and their absence has had a significant impact on the bottom line for many companies.
One potential solution that has been proposed by some industry experts is the development of domestic casino markets within Korea and Japan. Both countries have traditionally had strict laws prohibiting and limiting the operation of casinos, but there have been calls in recent years to relax these laws in order to allow for the development of a domestic casino industry. This could potentially provide a new source of revenue for casino companies and could help to offset some of the difficulties faced due to the reliance on Chinese customers.
In conclusion, Asian casino companies have faced significant business difficulties due to China’s hard stance against cross-border gambling and restrictions on citizens leaving the country. These companies have had to adapt to a changing landscape and have employed various strategies to mitigate the impact of these challenges. Despite these efforts, however, it remains difficult for these companies to fully compensate for the loss of Chinese customers, and the future of the industry remains uncertain.
