MarketLine Industry Profile

Casinos & Gaming in South Korea

June 2020

Reference Code: 0117-2019

Publication Date: June 2020

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 Casinos & Gaming in South Korea

Industry Profiles

1. Executive Summary

1.1. Market value

The Korean casinos & gaming sector shrank by 0.7% in 2019 to reach a value of $8,241.9 million.

1.2. Market value forecast

In 2024, the Korean casinos & gaming sector is forecast to have a value of $6,308.6 million, a decrease of 23.5% since
2019.

1.3. Category segmentation

Casinos is the largest segment of the casinos & gaming sector in South Korea, accounting for 30.9% of the sector's
total value.

1.4. Geography segmentation

South Korea accounts for 4% of the Asia-Pacific casinos & gaming sector value.

1.5. Market rivalry

As gambling is only legal for foreigners in South Korea, the degree of rivalry is assessed as moderate.

1.6. Competitive Landscape

The US casino & gaming sector experienced declining growth in 2019. The sector consists of four leading players,
Majestar Co., Ltd, Kangwon Land Inc, Grand Korea Leisure Co Ltd and The Korea Lottery Commission. The main sector
players are based in South Korea, which indicates the strong presence of South Korean companies in the sector.
Players are focused on serving a broad client base and mitigating the risk of operating in a single market by operating
a broad product portfolio. The recent outbreak of coronavirus has led to either the cancellation or postponement of a
number of major sporting events globally, which has disrupted growth in the casinos & gaming sector significantly.
Soccer, one of the most popular sporting events to bet on, has seen a number of competitions postponed. The
decrease of sporting markets will undoubtedly have a negative impact on the sector, however the true extent of the
damage remains uncertain.

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 Casinos & Gaming in South Korea

Industry Profiles

TABLE OF CONTENTS
1. Executive Summary 2

1.1. Market value ................................................................................................................................. 2

1.2. Market value forecast ...................................................................................................................2

1.3. Category segmentation ................................................................................................................2

1.4. Geography segmentation .............................................................................................................2

1.5. Market rivalry ................................................................................................................................ 2

1.6. Competitive Landscape ................................................................................................................2

2. Market Overview 7

2.1. Market definition ........................................................................................................................... 7

2.2. Market analysis ............................................................................................................................ 8

3. Market Data 9

3.1. Market value ................................................................................................................................. 9

4. Market Segmentation 10

4.1. Category segmentation ..............................................................................................................10

4.2. Geography segmentation ...........................................................................................................11

5. Market Outlook 12

5.1. Market value forecast .................................................................................................................12

6. Five Forces Analysis 13

6.1. Summary .................................................................................................................................... 13

6.2. Buyer power ............................................................................................................................... 14

6.3. Supplier power ........................................................................................................................... 16

6.4. New entrants .............................................................................................................................. 17

6.5. Threat of substitutes ...................................................................................................................18

6.6. Degree of rivalry ......................................................................................................................... 19

7. Competitive Landscape 20

7.1. Who are the leading players?.....................................................................................................20

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Casinos & Gaming in South Korea

Industry Profiles

7.2. What strategies do the leading players follow? ..........................................................................20

8. Company Profiles 22

8.1. Grand Korea Leisure Co Ltd ......................................................................................................22

8.2. Majestar Co., Ltd ........................................................................................................................26

8.3. Kangwon Land Inc......................................................................................................................30

9. Macroeconomic Indicators 34

9.1. Country data ............................................................................................................................... 34

Appendix 36

Methodology............................................................................................................................................ 36

9.2. Industry associations ..................................................................................................................37

9.3. Related MarketLine research .....................................................................................................37

About MarketLine .................................................................................................................................... 38

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Industry Profiles

LIST OF TABLES
Table 1: South Korea casinos & gaming sector value: $ million, 2015–19 9

Table 2: South Korea casinos & gaming sector category segmentation: $ million, 2019 10

Table 3: South Korea casinos & gaming sector geography segmentation: $ million, 2019 11

Table 4: South Korea casinos & gaming sector value forecast: $ million, 2019–24 12

Table 5: Grand Korea Leisure Co Ltd: key facts 22

Table 6: Grand Korea Leisure Co Ltd: Annual Financial Ratios 23

Table 7: Grand Korea Leisure Co Ltd: Annual Financial Ratios (Continued) 24

Table 8: Grand Korea Leisure Co Ltd: Key Employees 25

Table 9: Majestar Co., Ltd: key facts 26

Table 10: Majestar Co., Ltd: Annual Financial Ratios 28

Table 11: Majestar Co., Ltd: Key Employees 29

Table 12: Kangwon Land Inc: key facts 30

Table 13: Kangwon Land Inc: Annual Financial Ratios 31

Table 14: Kangwon Land Inc: Annual Financial Ratios (Continued) 32

Table 15: Kangwon Land Inc: Key Employees 33

Table 16: South Korea size of population (million), 2015–19 34

Table 17: South Korea gdp (constant 2005 prices, $ billion), 2015–19 34

Table 18: South Korea gdp (current prices, $ billion), 2015–19 34

Table 19: South Korea inflation, 2015–19 34

Table 20: South Korea consumer price index (absolute), 2015–19 35

Table 21: South Korea exchange rate, 2015–19 35

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LIST OF FIGURES
Figure 1: South Korea casinos & gaming sector value: $ million, 2015–19 9

Figure 2: South Korea casinos & gaming sector category segmentation: % share, by value, 2019 10

Figure 3: South Korea casinos & gaming sector geography segmentation: % share, by value, 2019 11

Figure 4: South Korea casinos & gaming sector value forecast: $ million, 2019–24 12

Figure 5: Forces driving competition in the casinos & gaming sector in South Korea, 2019 13

Figure 6: Drivers of buyer power in the casinos & gaming sector in South Korea, 2019 14

Figure 7: Drivers of supplier power in the casinos & gaming sector in South Korea, 2019 16

Figure 8: Factors influencing the likelihood of new entrants in the casinos & gaming sector in South Korea,
2019 17

Figure 9: Factors influencing the threat of substitutes in the casinos & gaming sector in South Korea, 2019 18

Figure 10: Drivers of degree of rivalry in the casinos & gaming sector in South Korea, 2019 19

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 Casinos & Gaming in South Korea

Industry Profiles

2. Market Overview

2.1. Market definition

The casinos and gaming market consists of all forms of betting and gaming. All values are stated in terms of gross
gaming win (GGR). This is the total amount waged by customers minus the total amount paid out to customers as
winnings, but before the payment of any applicable taxes, disbursements to charitable or other causes by games
established for those purposes, or other expenses.
The casinos segment covers all gambling activities carried out within casino establishments, such as card games,
roulette, and slot machines located in casinos; tips and admission fees are included, but additional revenues such as
sales of food, drink, and accommodation are excluded.
The lotteries segment covers all state, private, and charitable lotteries, and includes traditional draws, scratchcard
games, and similar products offered by lottery operators.
The sports betting and related segment covers gambling on the outcome of horse races, football matches, and other
events, and includes gambling services offered by bookmakers and also pari-mutuel/totalisator operators.
The other segment covers bingo, slot machines located outside casinos, pachinko, etc. In North America, so-called
'Indian casinos' are covered in this segment, not the casino segment.
Online casino and gaming activity, with the exception of online purchases of lottery entry, is not included. Recreation-
only slot machines that do not pay out any form of prize are excluded.
The report only includes gaming activities that are legal in the country where they are offered.
All currency conversions were calculated using constant average annual 2019 exchange rates.
Figures presented in this report are calculated applying the "middle path" scenario - this is based on the current
situation in countries where the epidemic burst first, like China as a model countries and the announcements made by
governments, stating that the abnormal situation may last up to six months.
The assumption has been made that after this time the economy will gradually go back to the levels recorded before
the pandemics by the end of the year. It is also assumed that there is no widespread economic crisis as seen back in
2008 due to announced pay-outs across countries.
At the moment of preparation of this report in May 2020 the economic implications of the lock downs of many
economics are still very difficult to predict as there is no indication how long the pandemics could last, the number of
sectors forced to stay closed and the scale of the governmental' aid involved. At the same time the weight of the
pandemic seriousness is applied on the individual countries in this report based on death to population ratio recorded
in countries.
Majority of the industries will see the decline in volume of the goods and services offered by companies. Usually the
lower demand would cause the decrease the prices level. However, amid many governments’ ordered for many
industries to lock down and so the supply chain is distorted that in great pictures mitigate the results of lower
demand.
Applied scenarios differ depending on the individual sector, however generally sectors which involves intensive
manual labor and face to face interaction seem to be hit the most by present situation. On the other hand the internet
based businesses as well as the producers of the vital, subsisted products and services seems to take advantages of
the current events.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,
Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.

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Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,
Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

2.2. Market analysis

The South Korean casinos & gaming sector has experienced volatile growth during the historic period. The sector is
expected to decline during the forecast period with an exception in 2021.
The sector has experienced huge disruption from online betting. The online gambling industry continues to go from
strength to strength, and is now a major threat to casinos. Customers are now able to play the same games, and have
the same chances of winning, from the comfort of their own home. This has left traditional casino chains vulnerable to
online specialists such as Bet365. Online operators offer online casino games which reduces footfall into casinos.
Casinos rely on food and drinks sales to generate additional revenue, and lower footfall will reduce this revenue
stream.
The South Korean casinos & gaming sector had total gross gaming win of $8.2bn in 2019, representing a compound
annual growth rate (CAGR) of 2.2% between 2015 and 2019. In comparison, the Singaporean and New Zealand sectors
grew with CAGRs of 2% and 3.7% respectively, over the same period, to reach respective values of $6.7bn and $9.5bn
in 2019.
Fueling the revenue growth of foreigner-only casinos are Japanese tourists, according to the Korea Casino Association.
Data showed that the number of visitors to these casinos jumped 1.6% to 366,000 in the first two months of 2018.
The majority of visitors came from Japan, with the number of Japanese visitors growing by 5.2% and 3.9% in January
and February, respectively. Meanwhile, the number of Chinese tourists dropped by 3.2% and 5.2%, respectively.
Tourists from Taiwan grew by about 32.2% in February after dropping 16.7% during the first month of the year.
The casinos segment was the sector's most lucrative in 2019, with total gross gaming win of $2.5bn, equivalent to
30.9% of the sector's overall value. The sports betting and related segment contributed gross gaming win of $2.4bn in
2019, equating to 29.2% of the sector's aggregate value.
Casinos were the most profitable segment for the casino & gaming sector in 2019. Many customers also utilize other
services such as accommodation, food & drink, spas, and other leisure activities. Casino consumers enjoy a full-
package service rather than just gaming. On the other hand, sports betting was the second most successful segment
for the sector in 2019. The wide variety of sports that are available to gamble on increases the potential customer
base for sports gambling.
The performance of the sector is forecast to decline, with an anticipated compound annual rate of change (CARC) of -
5.2% for the five-year period 2019 - 2024, which is expected to drive the sector to a value of $6.3bn by the end of
2024. Comparatively, the Singaporean and New Zealand sectors will decline with CARCs of -7.7% and -2.6%
respectively, over the same period, to reach respective values of $4.5bn and $8.3bn in 2024.
The recent outbreak of coronavirus has led to the cancellation and postponement of many major sporting events,
which has disrupted growth in the casinos & gaming sector significantly. Soccer, one of the most popular sporting
events to bet on, has seen a number of competitions postponed, including the English Premier League, La Liga, and
the Champions League, all of which are lucrative markets for the casinos & gaming sector. More recently, UEFA
announced that Euro 2020 will now be postponed until 2021, and Tokyo 2020 Olympic games has also been
postponed for at least one year. The decrease of sporting events will have a negative impact on the sector, however
the true extent remains uncertain.

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 Casinos & Gaming in South Korea

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3. Market Data

3.1. Market value

The Korean casinos & gaming sector shrank by 0.7% in 2019 to reach a value of $8,241.9 million.
The compound annual growth rate of the sector in the period 2015–19 was 2.2%.

Table 1: South Korea casinos & gaming sector value: $ million, 2015–19

Year $ million KRW million € million % Growth

2015 7,559.5 8,812,100.0 6,751.7
2016 8,008.7 9,335,700.0 7,152.8 5.9%
2017 7,923.2 9,236,000.0 7,076.4 (1.1%)
2018 8,297.7 9,672,600.0 7,411.0 4.7%
2019 8,241.9 9,607,567.5 7,361.1 (0.7%)

CAGR: 2015–19 2.2%

SOURCE: MARKETLINE MARKETLINE

Figure 1: South Korea casinos & gaming sector value: $ million, 2015–19

SOURCE: MARKETLINE MARKETLINE

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4. Market Segmentation

4.1. Category segmentation

Casinos is the largest segment of the casinos & gaming sector in South Korea, accounting for 30.9% of the sector's
total value.
The Sports betting and related segment accounts for a further 29.2% of the sector.

Table 2: South Korea casinos & gaming sector category segmentation: $ million, 2019

Category 2019 %
Casinos 2,544.4 30.9%
Sports Betting And Related 2,404.7 29.2%
Lotteries 1,972.8 23.9%
Other 1,320.0 16.0%

Total 8,241.9 100%

SOURCE: MARKETLINE MARKETLINE

Figure 2: South Korea casinos & gaming sector category segmentation: % share, by value, 2019

SOURCE: MARKETLINE MARKETLINE

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 Casinos & Gaming in South Korea

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4.2. Geography segmentation

South Korea accounts for 4% of the Asia-Pacific casinos & gaming sector value.
New Zealand accounts for a further 4.6% of the Asia-Pacific sector.

Table 3: South Korea casinos & gaming sector geography segmentation: $ million, 2019

Geography 2019 %
New Zealand 9,491.7 4.6
South Korea 8,241.9 4.0
Singapore 6,733.1 3.3
Rest Of Asia-pacific 179,957.4 88.0

Total 204,424.1 99.9%

SOURCE: MARKETLINE MARKETLINE

Figure 3: South Korea casinos & gaming sector geography segmentation: % share, by value, 2019

SOURCE: MARKETLINE MARKETLINE

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5. Market Outlook

5.1. Market value forecast

In 2024, the Korean casinos & gaming sector is forecast to have a value of $6,308.6 million, a decrease of 23.5% since
2019.
The compound annual rate of change of the sector in the period 2019–24 is predicted to be -5.2%.

Table 4: South Korea casinos & gaming sector value forecast: $ million, 2019–24

Year $ million KRW million € million % Growth

2019 8,241.9 9,607,567.5 7,361.1 (0.7%)
2020 6,843.4 7,977,353.6 6,112.1 (17.0%)
2021 7,391.4 8,616,076.2 6,601.5 8.0%
2022 7,068.0 8,239,192.7 6,312.7 (4.4%)
2023 6,673.0 7,778,746.8 5,959.9 (5.6%)
2024 6,308.6 7,353,911.8 5,634.4 (5.5%)

CAGR: 2019–24 (5.2%)

SOURCE: MARKETLINE MARKETLINE

Figure 4: South Korea casinos & gaming sector value forecast: $ million, 2019–24

SOURCE: MARKETLINE MARKETLINE

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6. Five Forces Analysis

The casinos & gaming market will be analyzed taking operators of casinos, gaming machines, lotteries, and betting
(commercial, state-run and charitable operations) as players. The key buyers will be taken as individual customers,
and companies providing gaming machines, equipment, services, and real estate as the key suppliers.

6.1. Summary
Figure 5: Forces driving competition in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

As gambling is only legal for foreigners in South Korea, the degree of rivalry is assessed as moderate.
The fact that only foreigners can gamble reduces the number of buyers markedly and strengthens the position of
those who can as they do not need to travel to Korea, nor do they need to gamble. The existence of addictive forms of
gambling behavior indicates that some consumers are not making rational economic decisions and can become
dependent on gambling in their everyday lives. Such patterns weaken buyer power accordingly.
With regards to suppliers, size matters and a handful of suppliers dominate. Participants benefit from regulatory
barriers to entry, which make it difficult for new players to enter the sector and gain sector share.
Almost any leisure activity can act as a substitute for casinos and gambling. However, the rapid growth of online
gaming in certain countries represents a significant threat to the traditional sector. As a result, the threat from
substitutes is assessed as very strong.

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6.2. Buyer power

Figure 6: Drivers of buyer power in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

The fact that only foreigners can gamble in South Korea reduces the number of buyers markedly and strengthens the
position of those who can as they do not need to travel to Korea, nor do they need to gamble. Activities within this
sector are non-essential leisure activities, and consequently it should be expected that these activities are not vital to
buyers. However, this issue is complicated by gambling addictions. The existence of addictive gambling behavior
indicates that some consumers are not making rational economic decisions and can become dependent on gambling.
Such patterns weaken buyer power accordingly.
Consumers can choose from a wide range of gaming activities such as lotteries, gaming machines, poker, blackjack,
and sports betting. There are also several different methods of distribution (online, outlets, casinos etc.) However,
casinos tend to all possess the same activities, particularly in terms of the games that individuals can play and the
rewards they will receive for winning. Additionally, bar those who spend a substantial sum of money and gain loyalty
gifts (such as a free hotel suite for the biggest gamblers in Las Vegas); customers typically do not have any particular
loyalty to a casino brand. As such, buyer power is increased as there is no incentive to stick with a particular brand.
Sports betting offers a wide range of betting opportunities. The advent of bet-in-play options has seen sports betting
revenues grow significantly. Sports & events provide outcomes that gamers can wager on in the hope of picking the
correct result. The increasing popularity and coverage of sports is helping to drive interest as players feel better
informed and therefore more confident in their bets. Large events such as the FIFA World Cup attract greater-than-
normal volumes.
Lotteries are a significant percentage of the overall casinos & gaming sector globally. Lotteries are legal in many
countries in which other forms of gambling are not, such as Turkey for example, and there is often a high degree of
state involvement in the form of state entities as operators. In this way, the ongoing popularity and availability of
lotteries is critical to the health of the casinos & gaming sector. Casino games like roulette and blackjack have been
around for many years, but remain exciting to gamblers. Some of these games, such as roulette, are games of chance,
whereas poker requires a high level of skill to be highly successful. This is normally played in a tournament rather than
against the house, but casinos often serve as venues for these competitions and if they provide prize money, they
need to be aware of the skill levels present.
Switching costs for consumers vary according to the type of gambling. For example, many casinos require annual
membership fees; thus constituting a switching cost should a consumer change to a different casino before the annual
membership expires. Generally switching costs remain minimal, particularly in the case of betting shops. This
strengthens buyer power.

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Overall, there is a moderate degree of buyer power within the casinos and gambling sector.

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6.3. Supplier power

Figure 7: Drivers of supplier power in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

Suppliers to the casinos and gambling sector vary according to the player. Gaming machines and related equipment
and services are vital for some players.
Companies that supply equipment, machinery, or services are integral to the success of players. There is a low
bargaining power of suppliers in the casinos and gambling sector because casinos often require furnishing and food
supplies, which are typically undifferentiated between rival suppliers. Large casino chains can exert pressure on small
suppliers to take advantages of pricing. Some large supply companies may offer equipment that has high consumer
demand, such as certain gaming machines. In many cases companies establish successful niches, creating lottery
machines and networks. There is a rare chance of backwards integration, as manufacturing machines is generally a
more costly and different level of expertise compared to running casinos and gambling services. This enhances
supplier power.
Casinos have very specific equipment due to the nature of the games they offer. Tables for games such as craps and
Baccarat are necessary and a high level of craftsmanship is required to achieve the required quality and aesthetic.
Casinos also need electronic and mechanical machines. Electronic versions of casino games are popular, particularly
among less affluent gamblers. For table games and roulette wheels, specialists such as Cammech and
TCSJOHNHUXLEY have forged a strong reputation, enhancing their power in this sector. Lotteries also have strong
incumbents, such as Smartplay International, which serves over 400 organizations in more than 85 countries.
Larger suppliers diversify geographically to guard against over-dependence on just one particular sector. However,
most manufacturers of gaming machines tend to be specialized in this sector. Since the gaming industry is highly
important to their survival, this weakens supplier power.
Overall, supplier power is assessed as moderate.

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6.4. New entrants

Figure 8: Factors influencing the likelihood of new entrants in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

The casinos and gambling sector operates differently from country to country, according to regulatory and legislative
barriers, which often reflect the cultural acceptance of gambling in a particular country.
A new company wishing to enter the casinos and gambling sector would require fairly large amounts of capital to
establish a casino, betting shop or gaming hall, employ staff, and acquire gaming equipment. However, the willingness
of customers to switch from one gaming company to another, coupled with an easy access to suppliers, is conducive
to the entry of new players.
South Korea has plenty of potential for new entrants with prospective customers from China, Japan and other
Southeast Asian countries. This is important as local residents can only legally gamble in the state-owned Kangwon
Land resort in the Kangwon Province which would restrict any new entrants to tourists. Recent healthy growth could
serve as a catalyst for new entrants.
Overall, the risk of new entrants is moderate.

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6.5. Threat of substitutes

Figure 9: Factors influencing the threat of substitutes in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

For the casinos and gambling sector as a whole, almost any leisure activity can act as a substitute. These activities
have minimal switching costs and may also be cheaper than gambling for consumers.
The threat of substitutes is increasing. Low restrictions have resulted in the legalization of many forms of gambling.
Other forms of gambling such as tribal land casinos, internet-based casinos, and waterborne casinos may be attractive
to customers of traditional casinos. Aside from cost advantages, some customers may value the social aspect of non-
gambling forms of gaming facilities.
For those wishing to engage in an activity which offers the possibility of winning money, online gambling is an option.
In South Korea, online gambling is illegal and subject to crackdowns, which makes this a less likely option. One of the
alternatives is to access foreign sites via e-wallets and VPN services.
The threat of substitutes in this sector is very strong.

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6.6. Degree of rivalry

Figure 10: Drivers of degree of rivalry in the casinos & gaming sector in South Korea, 2019

SOURCE: MARKETLINE MARKETLINE

For many players, gaming is their sole or principal activity, so it is vital that they maintain their gaming revenues. Some
companies, however, have a more diverse offering; casinos and hotels is a common combination, which weakens
rivalry somewhat and makes an exit from the sector easier.
The casinos and gambling industry in South Korea is dominated by three key players, with residents only allowed to
gamble in one casino in Kangwon. As the sector, particularly casinos, relies heavily on the tourism industry, this
increases the degree of rivalry. Moderate sector growth will decrease the degree of rivalry.
Many players have the ability to differentiate their offerings through additional services such as entertainment
(concerts, special events), reward programs, tournaments, or non-gaming facilities (restaurants, arcades, spas).
Overall, rivalry within this sector is assessed as moderate.

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7. Competitive Landscape
The US casino & gaming sector experienced declining growth in 2019. The sector consists of four leading players,
Majestar Co., Ltd, Kangwon Land Inc, Grand Korea Leisure Co Ltd and The Korea Lottery Commission. The main sector
players are based in South Korea, which indicates the strong presence of South Korean companies in the sector.
Players are focused on serving a broad client base and mitigating the risk of operating in a single market by operating
a broad product portfolio. The recent outbreak of coronavirus has led to either the cancellation or postponement of a
number of major sporting events globally, which has disrupted growth in the casinos & gaming sector significantly.
Soccer, one of the most popular sporting events to bet on, has seen a number of competitions postponed. The
decrease of sporting markets will undoubtedly have a negative impact on the sector, however the true extent of the
damage remains uncertain.

7.1. Who are the leading players?

Majestar Co., Ltd (Majestar) is the largest provider of casino & gaming services in South Korea. The company is based
in Seogwipo-si, Jeju, South Korea and offers a range of game including Baccarat, Blackjack, Caribbean Stud Poker,
Roulette, and TaiSai. The company also provides video gaming by inserting cash or game ticket into a game machine,
and can win betting prizes. Majestar offers TITO system for the game tickets, which can be used freely on any video
game machines. The company also provides VIP membership services and conducts various fun events.
Kangwon Land Inc (Kangwon Land) is the second largest provider of casino & gaming services in South Korea with
$3.9bn market cap. The company is based in Gangwon-do, South Korea and carries out the operation of tourist hotels,
casino, game development, and sports which include ski slopes and golf courses. The company operates casino under
the brand name, Kangwon Land Casino. It offers table game machines and slot machines. The company operates
hotels and condominiums which include Kangwon Land Hotel, High1 Hotel, Convention Hotel, Mountain Condo, Hill
Condo and Valley Condo. The company also provides Ski Courses, golf courses; and counseling and healing programs
for the gambling addiction.
Grand Korea Leisure Co Ltd (Grand Korea Leisure), a subsidiary of Korea Tourism Organization is the third largest
provider of casino & gaming services in South Korea. The company is based in Seoul, South Korea and operates
through its Seven Luck casino, a foreigners’ casino, which is a public enterprise established for the following purposes
to attract more foreign tourists. It offers services such as travel, accommodations, shopping and dining services. The
company also uses its casino operations to invest in building tourism-related infrastructures and public projects.
The Korea Lottery Commission (Lottery Commission) is the fourth largest provider of casino & gaming services in
South Korea. Lottery Commission was established on April 1, 2004, for the overall management and supervision of
lotteries and improve the effectiveness and transparency of sales proceeds. In 2008, the commission was put under
the Ministry of Strategy and Finance.

7.2. What strategies do the leading players follow?

Kangwon Land owns a well-diversified service portfolio that mitigates the risks associated with operating in a single or
select category. The company manages various businesses including casinos, hotels and theme parks, ski resorts and
golf courses. The company’s casino operates over 200 tables, 1,360 machines, and facilities including bars, buffets,
and VIP lounges. It also owns three hotels and three condominiums; a theme park; 18-hole golf course; an 18-slope ski
resort, ice hockey and ski teams and several gambling facilities. Its hotels provide various facilities and amenities such
as restaurants and bars, conference rooms, gym and sauna cafeterias, swimming pool, gift shop, cafe and game
rooms. Kangwon Land also provides Ski Courses, golf courses; and counseling and healing programs for gambling
addiction. The company's broad range of services enables the company to serve a diversified customer base and to
enhance its top-line performance.

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The Lottery Commission's functions include the formulation of lottery policies, decisions on types and prices of the
lottery games, total sales amount of lotteries issued and conditions of the issuance of lotteries. The Commission make
decisions on matters relating to lottery distribution costs, on matters relating to allocation of lottery proceeds and
their use, formulation of basic policies on lottery fund management, establish and modify lottery fund management
plan.

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8. Company Profiles

8.1. Grand Korea Leisure Co Ltd

8.1.1. Company Overview

Grand Korea Leisure Co Ltd (Grand Korea Leisure), a subsidiary of Korea Tourism Organization is an operator of
tourism business. The company operates through its Seven Luck casino, a foreigners casino, which is a public
enterprise established for the following purposes to attract more foreign tourists. It offers services such as travel,
accommodations, shopping and dining services. The company also uses its casino operations to invest in building
tourism-related infrastructures and public projects. Grand Korea Leisure is headquartered in Seoul, South Korea.
The company reported revenues of (Won) KRW480,339.2 million for the fiscal year ended December 2018 (FY2018), a
decrease of 4.2% over FY2017. In FY2018, the company’s operating margin was 21.9%, compared to an operating
margin of 21.5% in FY2017. In FY2018, the company recorded a net margin of 16.2%, compared to a net margin of
16.1% in FY2017. The company reported revenues of KRW109,181.1 million for the first quarter ended March 2019, a
decrease of 2.4% over the previous quarter.

8.1.2. Key Facts

Table 5: Grand Korea Leisure Co Ltd: key facts

Head office: 610 Samseong-roGangnam-gu, Seoul City, Seoul , Republic of Korea (South Korea)
Number of Employees: 1722
Website: www.grandkorea.com
Financial year-end: December
Ticker: 114090
Stock exchange: Korea Stock Exchange

SOURCE: COMPANY WEBSITE MARKETLINE

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Table 6: Grand Korea Leisure Co Ltd: Annual Financial Ratios

Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % -6.48 8.42 -8.56 -4.18 2.17
Operating Income Growth % -19.72 28.12 -28.53 -2.73 -8.85
EBITDA Growth % -18.58 28.42 -27.44 -2.40 -8.71
Net Income Growth % -21.27 24.65 -29.56 -3.47 -6.87
EPS Growth % -21.40 25.38 -30.06 -3.63 -5.88
Working Capital Growth % 0.32 14.29 6.72 -27.64 -14.53
Equity Ratios
EPS (Earnings per Share) KRW 1483.00 1848.54 1302.04 1256.81 1170.41
Dividend per Share KRW 831.00 1000.00 730.00 710.00 659.00
Dividend Cover Absolute 1.78 1.85 1.78 1.77 1.78
Book Value per Share KRW 7375.88 8386.08 8601.51 9087.07 9460.29
Profitability Ratios
Gross Margin % 30.64 33.44 29.20 29.26 27.33
Operating Margin % 23.33 27.57 21.55 21.87 19.51
Net Profit Margin % 18.14 20.86 16.07 16.18 14.75
Profit Markup % 44.18 50.24 41.24 41.37 37.61
PBT Margin (Profit Before Tax) % 23.93 27.39 21.41 21.64 19.50
Return on Equity % 20.11 22.04 15.14 13.83 12.37
Return on Capital Employed % 24.49 27.77 19.21 17.59 13.73
Return on Assets % 14.10 16.56 11.02 10.38 8.64
Return on Working Capital % 36.28 40.66 27.23 36.60 39.04
Operating Costs (% of Sales) % 76.67 72.43 78.45 78.13 80.49
Administration Costs (% of Sales) % 6.45 4.87 6.50 6.18 6.49
Liquidity Ratios
Current Ratio Absolute 2.93 3.00 3.34 2.70 2.16
Quick Ratio Absolute 2.92 2.99 3.33 2.69 2.15
Cash Ratio Absolute 2.81 2.88 3.21 2.57 2.02
Leverage Ratios
Debt to Equity Ratio Absolute 0.17
Net Debt to Equity Absolute -0.43 -0.24 -0.23 -0.06
Net Debt to Equity Absolute -0.44 -0.43
Debt to Capital Ratio Absolute 0.14
Efficiency Ratios
Asset Turnover Absolute 0.78 0.79 0.69 0.64 0.59
Fixed Asset Turnover Absolute 8.70 6.21 5.23 5.38 3.79
Inventory Turnover Absolute 185.11 189.70 164.94 143.05 144.17
Current Asset Turnover Absolute 0.99 1.04 0.89 0.94 1.08
Capital Employed Turnover Absolute 1.05 1.01 0.89 0.80 0.70

SOURCE: COMPANY FILINGS MARKETLINE

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Table 7: Grand Korea Leisure Co Ltd: Annual Financial Ratios (Continued)

Key Ratios 2014 2015 2016 2017 2018

Working Capital Turnover Absolute 1.56 1.48 1.26 1.67 2.00

SOURCE: COMPANY FILINGS MARKETLINE

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Table 8: Grand Korea Leisure Co Ltd: Key Employees

Name Job Title Board

Byeong-Muk Jeon Director Non Executive Board
Hwang-Suk Park Executive Vice President, Marketing Executive Board
Jung-Seok Kang Executive Vice President, Busan Sales Executive Board
Lee Gi-u Chairman and President Executive Board
Nam-Sun Yun Executive Vice President, Management Executive Board
Seo Jun-Yeong Director Non Executive Board
Sin Sang-Yong Director Non Executive Board
Yong-Sik Chae Director Non Executive Board

SOURCE: COMPANY FILINGS MARKETLINE

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8.2. Majestar Co., Ltd

8.2.1. Company Overview

Majestar Co., Ltd (Majestar) carries out the business of operation of casino. It offers a range of game including
Baccarat, Blackjack, Caribbean Stud Poker, Roulette, and TaiSai. The company also provides video gaming by inserting
cash or game ticket into a game machine, and can win betting prizes. Majestar offers TITO system for the game
tickets, which can be used freely on any video game machines. The company also provides VIP membership services
and conducts various fun events. Majestar is headquartered in Seogwipo-si, Jeju, South Korea.
The company reported revenues of (Won) KRW15,780 million for the fiscal year ended December 2018 (FY2018), an
increase of 94.4% over FY2017. The operating loss of the company was KRW6,838.5 million in FY2018, compared to an
operating loss of KRW13,179.4 million in FY2017. The net loss of the company was KRW4,991.8 million in FY2018,
compared to a net loss of KRW19,975.2 million in FY2017. The company reported revenues of KRW3,762.2 million for
the first quarter ended March 2019, a decrease of 51.3% over the previous quarter.

8.2.2. Key Facts

Table 9: Majestar Co., Ltd: key facts

Number of Employees: 129

Website: www.majestar.asia
Financial year-end: December
Ticker: 035480
Stock exchange: KOSDAQ

SOURCE: COMPANY WEBSITE MARKETLINE

8.2.3. Business Description

Majestar Co., Ltd (Majestar) is engaged in the operation of casino. It operates in South Korea.
The company offers a range of game including Baccarat, Blackjack, Caribbean Stud Poker, Roulette, Taisai, and Video
Game.

Its Baccarat is a card game played between two hands, the player and the banker. The participants bet on the hand of
either the “player” or the “banker”.
The company’s Blackjack is a cards game that is distributed to the dealer and player(s) in turns and whoever has the
sum of cards that comes closest to number 21 wins.
Majestar’s Caribbean Stud Poker is a card game under which each player and the dealer get five cards. The hand with
the highest value wins.
Its Roulette is a table casino game played with Roulette wheel. A croupier spins a Roulette wheel in one direction,
then spins a ball in the opposite direction around a tilted circular track (canoe); then the ball eventually loses
momentum and falls onto the wheel and into one of colored and numbered pockets on the wheel.
The company’s Taisai is a table casino game where the sum of three dice from a Dice Shaker determines a winner and
a winning amount. Player wins when one of the betting number or the sum of betting numbers match the sum of
three dice.

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Majestar’s Video Game is a game in which one insert cash or game ticket into a video game machine, a customer start
a game by pressing the button on a machine.
Additionally, the company offers VIP membership services and conducts various fun events at the casino.

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Table 10: Majestar Co., Ltd: Annual Financial Ratios

Key Ratios 2014 2015 2016 2017 2018

Growth Ratios
Sales Growth % -3.34 -23.71 -30.51 -66.80 94.43
Operating Income Growth % -72.32 -999.23
EBITDA Growth % -70.89 -901.23
Net Income Growth % -312.51
Working Capital Growth % -438.88 72.21 -23.52 -158.69 -282.30
Equity Ratios
EPS (Earnings per Share) KRW -2125.40 -225.46 -1741.59 -1252.96 -548.20
Book Value per Share KRW 6810.60 6756.10 6144.02 4143.52 3552.84
Profitability Ratios
Gross Margin % 42.52 41.71 -10.36 -54.47 30.62
Operating Margin % 18.16 6.59 -85.24 -162.39 -43.34
Net Profit Margin % 3.22 -8.97 -91.13 -246.12 -31.63
Profit Markup % 73.97 71.56 -9.39 -35.26 44.12
PBT Margin (Profit Before Tax) % -18.83 4.20 -87.19 -251.29 -31.64
Return on Equity % 4.22 -7.53 -39.92 -52.94 -15.43
Return on Capital Employed % 22.46 5.16 -36.09 -32.98 -20.13
Return on Assets % 2.36 -5.86 -33.69 -27.54 -9.49
Return on Working Capital % 80.88 13.00 -152.82 -46.88
Operating Costs (% of Sales) % 81.84 93.41 185.24 262.39 143.34
Administration Costs (% of Sales) % 22.11 34.50 64.86 98.11 66.96
Liquidity Ratios
Current Ratio Absolute 1.61 3.11 1.64 0.69 3.86
Quick Ratio Absolute 1.61 3.07 1.63 0.69 3.79
Cash Ratio Absolute 1.14 1.63 1.39 0.01 3.46
Leverage Ratios
Debt to Equity Ratio Absolute 0.24 0.01 0.16 0.03
Net Debt to Equity Absolute -0.21 -0.24 0.01 0.29 -0.53
Debt to Capital Ratio Absolute 0.19 0.01 0.14 0.03
Efficiency Ratios
Asset Turnover Absolute 0.73 0.65 0.37 0.11 0.30
Fixed Asset Turnover Absolute 8.54 6.96 5.30 2.18 4.97
Inventory Turnover Absolute 52.72 110.21 87.95 54.25 38.80
Current Asset Turnover Absolute 1.35 1.31 0.80 0.31 0.83
Capital Employed Turnover Absolute 1.24 0.78 0.42 0.20 0.46
Working Capital Turnover Absolute 4.45 1.97 1.79 1.08

SOURCE: COMPANY FILINGS MARKETLINE

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Table 11: Majestar Co., Ltd: Key Employees

Name Job Title Board

Byeong Gwon Jang Vice Chairman Executive Board
Chang Ho Cho Vice President Senior Management
Chang Hyeon Lee Chief Executive Officer Executive Board
Chang Hyeon Lee Director Executive Board

SOURCE: COMPANY FILINGS MARKETLINE

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8.3. Kangwon Land Inc

8.3.1. Company Overview

Kangwon Land Inc (Kangwon Land) is a provider of hotel and recreation services. The company carries out the
operation of tourist hotels, casino, game development, and sports which include ski slopes and golf courses. The
company operates casino under the brand name, Kangwon Land Casino. It offers table game machines and slot
machines. The company operates hotels and condominiums which include Kangwon Land Hotel, High1 Hotel,
Convention Hotel, Mountain Condo, Hill Condo and Valley Condo. The company also provides Ski Courses, golf
courses; and counseling and healing programs for the gambling addiction. Kangwon Land is headquartered in
gangwon-do, South Korea.
The company reported revenues of (Won) KRW1,438,059.3 million for the fiscal year ended December 2018 (FY2018),
a decrease of 7.1% over FY2017. In FY2018, the company’s operating margin was 28.4%, compared to an operating
margin of 33.1% in FY2017. In FY2018, the company recorded a net margin of 20.7%, compared to a net margin of
28.3% in FY2017. The company reported revenues of KRW377,447.6 million for the first quarter ended March 2019,
an increase of 7.3% over the previous quarter.

8.3.2. Key Facts

Table 12: Kangwon Land Inc: key facts

265 High1-Gil, Sabuk-Eup, JEONGSEON, Gangwon, Republic of Korea (South

Head office:
Korea)
Number of Employees: 3620
Website: kangwonland.high1.com
Financial year-end: December
Ticker: 035250
Stock exchange: Korea Stock Exchange

SOURCE: COMPANY WEBSITE MARKETLINE

8.3.3. Business Description

Kangwon Land Inc (Kangwon Land) carries out the management of casinos, hotels, condos, ski resorts, games,
cableway facility operation and golf courses.
The company operates through seven reportable business segments: Casino, Hotels, Condominiums, Ski Slopes, Golf
Courses, Games and Others.
The company had three subsidiaries at the end of FY2018. It has operations in South Korea.

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Table 13: Kangwon Land Inc: Annual Financial Ratios

Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 9.17 3.84 -8.77 -7.09 5.70
Operating Income Growth % 16.60 -2.40 -11.69 -20.42 22.81
EBITDA Growth % 16.46 -2.26 -11.33 -19.88 22.68
Net Income Growth % 22.90 2.93 -3.73 -32.06 12.56
EPS Growth % 21.56 9.37 -6.21 -30.83 6.80
Working Capital Growth % 45.30 0.44 35.97 -24.27 9.25
Equity Ratios
EPS (Earnings per Share) KRW 2178.39 2242.24 2158.51 1466.55 1650.68
Dividend per Share KRW 980.00 990.00 990.00 900.00 900.00
Dividend Cover Absolute 2.22 2.26 2.18 1.63 1.83
Book Value per Share KRW 14784.99 16042.90 17269.02 17691.39 18337.39
Profitability Ratios
Gross Margin % 53.50 53.72 52.78 49.27 51.54
Operating Margin % 36.42 34.23 33.13 28.38 32.97
Net Profit Margin % 27.03 26.80 28.27 20.68 22.02
Profit Markup % 115.06 116.07 111.78 97.10 106.35
PBT Margin (Profit Before Tax) % 36.35 35.18 36.58 28.56 32.16
Return on Equity % 14.73 13.98 12.50 8.29 9.00
Return on Capital Employed % 19.66 17.81 14.63 11.35 13.23
Return on Assets % 12.50 11.85 10.72 7.06 7.72
Return on Working Capital % 54.79 53.24 34.58 36.34 40.85
Operating Costs (% of Sales) % 63.58 65.77 66.87 71.62 67.03
Administration Costs (% of Sales) % 16.30 16.49 17.60 18.37 17.50
Liquidity Ratios
Current Ratio Absolute 2.63 2.52 3.18 2.77 2.88
Quick Ratio Absolute 2.63 2.52 3.17 2.76 2.88
Cash Ratio Absolute 2.56 2.46 3.09 2.67 2.81
Leverage Ratios
Debt to Equity Ratio Absolute 0.02
Net Debt to Equity Absolute -0.03 -0.03
Net Debt to Equity Absolute -0.03 -0.03
Debt to Capital Ratio Absolute 0.02
Efficiency Ratios
Asset Turnover Absolute 0.46 0.44 0.38 0.34 0.35
Fixed Asset Turnover Absolute 1.19 1.27 1.18 1.10 1.13
Inventory Turnover Absolute 537.50 535.75 560.21 595.97 307.88
Current Asset Turnover Absolute 1.05 0.95 0.78 0.73 0.84
Capital Employed Turnover Absolute 0.54 0.52 0.44 0.40 0.40

SOURCE: COMPANY FILINGS MARKETLINE

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Table 14: Kangwon Land Inc: Annual Financial Ratios (Continued)

Key Ratios 2014 2015 2016 2017 2018

Working Capital Turnover Absolute 1.50 1.56 1.04 1.28 1.24

SOURCE: COMPANY FILINGS MARKETLINE

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Table 15: Kangwon Land Inc: Key Employees

Name Job Title Board

Do Hyeong Lee Assistant Managing Director Senior Management
Eun Seok Choi Assistant Managing Director Senior Management
Gyeong Jung Kim Director Executive Board
Gyeong Jung Kim Vice President Executive Board
Hong Gyun Jang Assistant Managing Director Senior Management
Hye Gyeong Baek Assistant Managing Director Senior Management
Hyung Min Han Executive Vice President Executive Board
Jang Kyungjae Director Non Executive Board
Jingak Kim Director Non Executive Board
Jong Hwa Won Assistant Managing Director Senior Management
Kim Joo-il Director Non Executive Board
Kyungsik Choi Director Non Executive Board
Lee Moon Geun Director Non Executive Board
Lee Tae Hee Director Non Executive Board
Reindeer Kwon Director Non Executive Board
Song Seok Doo Executive Auditor Senior Management
Tae Gon Moon Chief Executive Officer Executive Board
Tae Gon Moon Director Executive Board

SOURCE: COMPANY FILINGS MARKETLINE

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9. Macroeconomic Indicators

9.1. Country data

Table 16: South Korea size of population (million), 2015–19

Year Population (million) % Growth

2015 50.6 0.4%
2016 50.8 0.4%
2017 51.0 0.3%
2018 51.1 0.3%
2019 51.3 0.3%

SOURCE: MARKETLINE MARKETLINE

Table 17: South Korea gdp (constant 2005 prices, $ billion), 2015–19

Year Constant 2005 Prices, $ billion % Growth

2015 1,288.9 3.8%
2016 1,339.1 3.9%
2017 1,390.1 3.8%
2018 1,443.2 3.8%
2019 1,498.7 3.8%

SOURCE: MARKETLINE MARKETLINE

Table 18: South Korea gdp (current prices, $ billion), 2015–19

Year Current Prices, $ billion % Growth

2015 1,530.6 5.7%
2016 1,629.6 6.5%
2017 1,734.3 6.4%
2018 1,847.5 6.5%
2019 1,967.0 6.5%

SOURCE: MARKETLINE MARKETLINE

Table 19: South Korea inflation, 2015–19

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Year Inflation Rate (%)

2015 2.3%
2016 2.7%
2017 2.8%
2018 2.8%
2019 2.8%

SOURCE: MARKETLINE MARKETLINE

Table 20: South Korea consumer price index (absolute), 2015–19

Year Consumer Price Index (2005 = 100)

2015 129.7
2016 133.2
2017 136.9
2018 140.8
2019 144.7

SOURCE: MARKETLINE MARKETLINE

Table 21: South Korea exchange rate, 2015–19

Year Exchange rate ($/KRW) Exchange rate (€/KRW)

2015 1,132.1100 1,256.0856
2016 1,160.9200 1,284.5900
2017 1,128.8717 1,276.9839
2018 1,100.4961 1,298.8611
2019 1,165.6969 1,305.1753

SOURCE: MARKETLINE MARKETLINE

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Appendix

Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of
each definition are carefully reviewed at the start of the research process to ensure they match the requirements of
both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data
to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which
can then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

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9.2. Industry associations

9.2.1. National Gambling Control Commission

39 Hyoja-ro, Jongno-gu Seoul, 110034 Korea

Tel.: 822-3704-0500
Fax: 822-3704-0579
http://www.ngcc.go.kr

9.2.2. Asia Pacific Lottery Association (APLA)

74 Walters Drive, Osborne Park, Western Australia 6017

Tel.: 61 8 9340 5371
Fax: 61 8 9443 1464
www.asiapacific-lotteries.com

9.2.3. World Lottery Association

Lange Gasse 20, CH-4002 Basel, Switzerland

Tel.: 41 61 284 1111
Fax: 41 61 284 1350
www.world-lotteries.org

9.3. Related MarketLine research

9.3.1. Industry Profile

Casinos and Gaming in China

Global Casinos and Gaming
Casinos and Gaming in Japan
Casinos and Gaming in Asia-Pacific
Casinos and Gaming in the United States

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