Korea’s Board of Audit and Inspection (BAI) announcement to further restrict yearly visits to casinos form from 148 days to 100 days to have limited impact on the business: J.P. Morgan. 

Following the report from Yonhap News Agency, citing the BAI, J.P. Morgan wrote that “despite the headline, we believe the news has little, if any, impact on fundamentals.”

The leading brokerage’s report on the same development narrates the news as “non-event” and the brokerage continued to remain bullish on the KWL share prices.

J.P. Morgan report also rated the KWL stock as “overweight”, despite the fact that KWL prices dropped 2 percent on news on Friday, when Korea Exchange index KOSPI closed up 1 percent. 

2016 revival

The directive was requested by the BAI authorities to the casino operators with an intent to prevent the occurrence of high-risk customers who suffer from gambling addiction, the Yonhap news report read.  

But J.P. Morgan’s report argued it differently: “First, this isn’t really a new news – BAI had, back in 2016, asked KWL to limit a player’s annual visits to 100 days. This is why KWL had imposed the current scheme from 2017, ie via a monthly visit cap, although the loophole allows a player to visit up to 148 days in a year.”


The media report further narrated of the National Assembly having requested Kangwon Land to reduce the number of days of casino users to less than 100 days a year to prevent the occurrence of high-risk customers who enter the casino excessively.

The brokerage report emphasized on the fact that, “Those visiting KWL more than 100 days a year accounted for only about 0.3% of total players even before COVID,” and so the brokerage continues to remain bullish on the KWL share prices.

“This was merely a reiteration from BAI’s regular audit; hence it may NOT signal the overall direction of the government’s policy, in our view. In short, we view this headline as largely a non-event,” the brokerage report read.


J.P. Morgan report explaining the rating of stock being Overweight read, “Our OW thesis has been – and still is – based on our belief that KWL’s business could go back to pre-COVID-19 levels sometime in 2022, comfortably pushing the stock beyond the W31k level (the 2019 average), considering the improved regulatory environment (e.g., increased capacity and 20-year extension of operating permit till 2045)”

Also the report indicated some key risk indicators while being bullish is that, “Key downside risks include: (1) a slower-than-expected rollout of capacity resumption; (2) an unexpected spike in COVID-19 cases in Korea; and (3) a weaker-than-expected macro backdrop, which could weigh on the core casino business.”