Kangwon Land's non-casino businesses have run up cumulative losses of nearly 1.7 trillion won ($1.2 billion), raising concerns that a large share of its casino earnings is being absorbed by hotels, condominiums and ski facilities rather than funding its founding mission of reviving South Korea's former coal-mining regions.
Cumulative losses across seven non-casino businesses reached 1.685 trillion won through last year, according to data submitted by Kangwon Land to the office of Rep. Koo Ja-keun of the People Power Party, a member of the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee, on the 11th. Over the same period, the casino business posted a cumulative surplus of 15.7245 trillion won. The cumulative figures add up profit and loss from each business from the start of its operations through last year.
The non-casino segment recorded its largest annual loss of 168.7 billion won in 2020 at the height of the COVID-19 pandemic, and has posted deficits of more than 130 billion won every year since. Last year's loss came to 147.4 billion won, with all seven non-casino businesses in the red after the golf course, which had remained profitable, also swung to a loss.
The National Assembly Budget Office pointed to structural profitability problems in the non-casino businesses in its recently published report on the status and issues of public institutions in 2026. Revenue from six non-casino segments, excluding the slot machine manufacturing business, totaled 183.4 billion won last year, while total costs reached 341.3 billion won, or 1.86 times revenue. At the Palace Hotel, total costs were 3.11 times revenue, followed by the ski resort at 2.36 times, Water World at 2.30 times and the condominium business at 2.19 times, leaving revenue insufficient to cover fixed costs.
The chronic losses limit how much of the casino's earnings can be channeled back into the region. The budget office said a structure in which much of the profit generated by the casino is used to offset non-casino losses has persisted. Because Kangwon Land was granted an exception allowing domestic customers into its casino in order to revive the economy of former coal-mining areas, the office said its business structure needs to be improved.
Kangwon Land's K-HIT project, an investment program worth about 3 trillion won through 2035, adds to the strain. The concern is that pressure could mount if large-scale investment proceeds while the earnings structure of the existing non-casino businesses remains unchanged. The budget office said it was necessary to review the cost structure and operating performance of each business and seek measures that take into account both the public purpose of promoting tourism in former coal-mining regions and financial soundness.
Koo said the exceptional permission for a casino open to domestic visitors was granted so that Kangwon Land would revive the economy of former coal-mining areas and create new growth engines. "We need a sweeping review of the competitiveness and business structure of the non-casino operations so the company can break away from a structure dependent on casino earnings and build self-sustaining growth engines for the region," he said.